airBaltic eyes IPO in 2022/3, opens Lithuanian entity

airBaltic (BT, Riga) has submitted a solution to Latvia’s Ministry of Transport to recover the EUR250 million euros (USD299 million) the state has invested in the company’s equity, chief executive Martin Gauss has told the news agency LETA. The proposal envisages an Initial Public Offering (IPO) on the Nasdaq Riga stock exchange and possibly a dual listing. “We have submitted information on how we propose to do this to the ministry, and the ministry will then submit this to the Cabinet of Ministers. As we already know, we’ve offered to start listing airBaltic’s shares. However, the earliest this could take place would be the end of 2022 or the beginning of 2023,” he said in the November 27 interview. The overall aim of the IPO would be for the state to recover at least the amount that it invested, but the airline may encourage the government to seek to raise EUR500 million (USD597 million) in the offering, Gauss said. “It would be premature to give specific figures because we have not even attracted banks to the IPO. But our goal is definitely to organise the biggest IPO in the Baltics because airBaltic’s story is global on the one hand and very local on the other. The process is almost always more important than dry figures,” he explained. The European Commission has already been informed about the plan, but first, the government “must now look at our proposal and figure out if it will accept it.” As previously reported, Brussels approved the state aid on July 3. The state must recoup the investment within five years, with a possible extension to seven years. An alternative solution is to find a single buyer who would be willing to acquire airBaltic shares from the state equivalent to the same sum, but this is a very unlikely scenario, for the time being, Gauss speculated. Following the measure, the Latvian state now owns a 96.14% stake in airBaltic, leaving 3.86% in the hands of Danish entrepreneur Lars Thuesen’s Latvian vehicle Aircraft Leasing 1.