On Friday, August 30, the government agreed in a closed session that after the initial public offering (IPO) of shares in Latvian national airline airBaltic, the state should retain at least 25% plus one share in the company's capital, Transport Minister Kaspars Briškens (Progressives) told reporters after the session. The minister explained that the current negotiations with the strategic investor in airBaltic do not concern the sale of a controlling stake, but the acquisition of a minority stake before or during the IPO, as well as possible participation in the IPO, are being discussed. "The condition of the state, agreed upon by the government on Friday, is that after the IPO, the state should retain at least 25% plus one share, which is a blocking minority stake," Briškens said. Commenting on the assumption that this means that Latvia is ready to give up its controlling stake in airBaltic after the IPO, the transport minister confirmed this version. "If we can thus ensure both the attraction of a strategic investor and sufficient capital through an IPO, then the decision made today provides for this. If the company is able to attract sufficient capital through an IPO to implement its current business plan, while simultaneously attracting a strategic investor and without state investment in the IPO, then the state is ready to support such retention of participation in the amount of a blocking minority stake," the minister added. airBaltic Supervisory Board Chairman Klavs Vasks added that on Friday the government supported airBaltic's plan to continue advancing the airline's IPO, including all preparatory work. At the same time, airBaltic will continue negotiations with a strategic investor as a condition for the IPO. "There are currently no comments on the exact distribution of shares, since each investment process evaluates the market value of the company and the amount of investment in exchange for the company's shares. Negotiations are ongoing, since the company seeks to maximize the benefit for the state from the strategic investor," Vasks said. Vasks also reported that decisions had been made on airBaltic’s further tasks for a successful IPO – consolidation of share capital and relevant decisions to be submitted to the Register of Enterprises. A conceptual decision had also been made that the company would not require any additional investments from the state, and scenarios in which the state could invest in the IPO process were not being considered. “Of course, various development scenarios are not excluded,” Vasks added. Commenting on whether the IPO process and attracting a strategic investor are separate processes, Vasks said that attracting an investor is an ongoing process, but an IPO cannot take place without attracting a strategic investor. The head of the airBaltic Supervisory Board did not provide further comments to identify the investor, citing the ongoing negotiation process. “The market testing plan for the IPO is planned for the beginning of the fourth quarter of this year. This means that the time period for reaching an agreement with the investor is the next few months,” he noted. As LETA reported earlier, a certain strategic investor, whose name has not yet been disclosed, has expressed interest in a possible IPO of airBaltic shares. According to Briškens, this is good news, as the investor could enter the capital of airBaltic with a minority stake, and then together they could move towards an IPO. airBaltic President Martin Gauss noted in mid-August that negotiations with a potential investor are ongoing before the IPO regarding the possible process in the second half of this year. However, the airline's representatives did not provide more detailed information about the strategic investor, noting that the negotiations are still ongoing and more information could be provided later. It was previously reported that airBaltic carried a total of 4.536 million passengers last year, which is 35.7% more than in 2022, and operated 44,100 flights, which is 18.3% more than in the previous year. airBaltic's audited turnover last year was EUR 664,289 million, up 33.2% from 2022, and the company posted a profit of EUR 33,852 million, compared to a loss in the previous year. The Latvian state currently owns 97.97% of airBaltic shares, while the financial investor "Aircraft Leasing 1", owned by Danish entrepreneur Lars Thusen, owns 2.03% of the shares.
