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airBaltic plans to launch public offering in second half of year

Latvian national airline airBaltic plans to announce a public offering of its shares in the second half of the year, the airline’s CEO Martin Gauss told Latvian Television (LTV) in an interview on Monday.

He pointed out that before the public offering, the airline has to refinance its bonds, and currently airBaltic is in the process of refinancing these bonds. “Let’s start by refinancing the bonds. Once we have done that successfully, we will launch a public offering for these shares,” Gauss said.

He also noted that the plan is to list airBaltic shares on Nasdaq Riga.

Gauss also said that this would be the largest public offering of shares in the Baltics.

At the same time, the airline’s CEO said that airBaltic was also talking to potential investors about raising EUR 100 million.

The 2023 annual report shows that the EUR 200 million bonds are maturing in July 2024, so the airline will seek external financing to refinance the bond, and it also plans to raise additional financing of around EUR 100 million.

“In addition to the EUR 200 million refinancing, the airline plans to raise an additional EUR 100 million to improve its cash balance and to facilitate the financing of further capital investments related to capacity expansion,” the annual report said.

It also mentions that airBaltic has engaged international investment banks and financial advisors and is working in parallel on various refinancing options, including raising funds on the public debt market and on the private debt market.

The report notes that the airline is pursuing two parallel refinancing routes: a public and a private debt route. If the private debt solution proves too costly for the airline, it plans to issue public emission with a view to completing the transaction by the end of April 2024.

The report also notes that the airline has also entered into discussions with shareholders, including the Latvian government, to explore their willingness to finance a part of the new debt on market terms alongside private investors.

Vitolds Jakovlevs, Chief Financial Officer of airBaltic, earlier told reporters that airBaltic aims to complete preparations for the bond refinancing in April. “Overall, airBaltic is on a good track and good progress is being made. We believe that in April we will have completed the preparations for the bond issue and then potentially we will be able to disclose more,” he said.

As reported, airBaltic issued a five-year bond of EUR 200 million in July 2019. More than 100 investors from 25 countries bought the bonds, with demand exceeding supply. The bonds bear an interest rate of 6.75 percent.

In early July 2020, after several months of assessment, the European Commission (EC) endorsed the Latvian government’s decision to inject EUR 250 million into airBaltic’s share capital to help it cope with the Covid-19 crisis. In two tranches over the following years, the state injected further funds into airBaltic’s share capital and the company now has a share capital of EUR 596.473 million. The EC decision requires Latvia to recover the investment within five to seven years.

Last year, airBaltic’s audited turnover was EUR 664.289 million, up 33.2 percent on 2022, and the company made a profit of EUR 33.852 million, compared to a loss of EUR 33.852 million the year before.

The Latvian state owns 97.97 percent of airBaltic’s shares, while the financial investor, Danish businessman Lars Thuesen’s Aircraft Leasing 1, owns 2.03 percent.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)


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