Latvia’s airBaltic Cuts Capital, Slashes Board Salaries Before IPO

Latvia’s airBaltic has officially completed its capital reduction ahead of its long-awaited initial public offering (IPO). The airline, which is majority-owned by the Latvian government, also announced that its executive board members had voluntarily reduced their salaries by 40% in preparation for the listing.

The restructuring consolidated airBaltic’s share classes from four to one, setting all shares at a nominal value of EUR0.10 ($0.105). This move reduced the airline’s capital by EUR571.3 million ($597.5 million) to EUR25.2 million ($26.4 million), according to Latvia’s LETA news agency. No shareholder compensation was involved in the share capital adjustment.

Board chairman Andrejs Martinovs described the salary cuts as a sign of confidence in the airline’s future and a commitment to ensuring a successful IPO. airBaltic aims to raise EUR300 million ($314 million) through the offering, which is expected to take place in 2024 or 2025 following previous delays.

Ahead of the IPO, Lufthansa Group acquired a 10% stake in airBaltic, marking a strategic investment in the Baltic region’s leading airline. The Latvian government, which currently owns 97.97% of the airline, plans to retain a 25% stake after the listing.

With its IPO approaching, airBaltic is positioning itself for financial sustainability and future growth. The capital reduction and executive salary cuts reflect efforts to streamline operations and enhance investor confidence as the airline prepares for a major transition in ownership.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com