On July 14, following authorization from the EC, the government supported the investment of EUR 250 million in airBaltic's share capital, increasing its holding to 91%.
Linkaits explained that the EC decision was a “very thick document”, but the basic idea is that the State needs to recover the funds invested in airBaltic over five to seven years.
"Conditional penalties are also provided if these funds are not recovered in time. According to the decision, the State of Latvia has to submit a specific plan on how the State will recover these funds. We have agreed that the airline's management will come up with a detailed vision over the next six months on how further work can be done to reduce the state's contribution to airBaltic," the Minister said.
When asked if there were any ideas on how the country could recover this money, Linkaits said that, before the crisis, airBaltic management was working on an international public offering of shares (IPO). “Consultants will be involved, who will assess at what point it is better to offer airline shares to private investors. This will be largely related to the overall development of the situation in the aviation sector," the Transport Minister said.
Latvia has to submit the plan to the EC in a year. “airBaltic management will come with a specific offer in six months' time, and we will also prepare for discussions in the government,” Linkaits said.
After several months of assessment, in early July, the EC supported the decision of the Latvian government to invest €250 million in the core capital of airBaltic. Currently, funding has not yet been invested and airBaltic's share capital is EUR 256 472 824, according to information from Firmas.lv.