Latvian state to spend 136 million euros more on airBaltic bonds

On Tuesday, April 30 the Latvian government supported the purchase of bonds of the Latvian national airline airBaltic worth up to 136 million euros, Minister of Transport Kaspars Briškens (Progressives) confirmed at a press conference. However, the final decision will have to be taken in the Saeima – which is likely to see the government come under heavy fire from opposition parties.

The state could purchase these bonds alongside private investors, under the same conditions as private investors, Briškens said, underlining that the bond-buying exercise will be in accordance with market rules and the conditions of European Union (EU) which generally take a dim view of excessive state aid in the commercial aviation sector.

"The state would be involved not only as an investor in the financial sector, but also in strategically important state-owned enterprises," Briškens said. The Latvian state owns nearly 98% of airBaltic shares.

The amount specified by Briškens was significantly larger than previously signalled. On Monday, Minister of Finance Arvils Ašeradens (New Unity) estimated that airBaltic bonds worth up to 100 million euros could be purchased .

airBaltic's audited turnover last year amounted to 664.289 million euros, which is 33.2% more than in 2022, and the company also made a profit of 33.852 million euros, as opposed to losses the year before. For many years already it has been suggested the company is been close to listing its shares on the stock markets, and such speculation continues. However, first the Covid crisis and then Russia's war of aggression in Ukraine may have made investors in the aviation sector in eastern Europe jittery and airBaltic has no immediate plans to open an IPO. 

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