Latvia’s airBaltic Seeks Funds Amid Investor Talks Delay

Negotiations with a strategic investor for airBaltic (BT, Riga) have faced delays, prompting concerns about the airline’s financial stability ahead of its planned IPO in 2025, according to Supervisory Board Chairman Klavs Vasks.

In a LinkedIn post, Vasks emphasized that airBaltic cannot sustain operations with its current negative equity. He suggested that additional state funding may be necessary if private investment does not materialize soon. “Without new capital, the airline risks failing to meet its strategic goals,” he stated, acknowledging potential backlash over further state intervention.

The carrier, majority-owned by the Latvian government (97.97%), faces unsustainable rates on bonds issued at 14.5%. In May 2024, airBaltic raised €340 million (USD 364.7 million) in bonds, followed by a €40 million extension later that year.

Despite Vasks’ statements, an airline spokesperson clarified that his comments reflect personal opinions, not official policy. They confirmed ongoing discussions with a strategic investor and reiterated the IPO timeline, with the earliest listing expected in 2025, pending favorable market conditions.

While airBaltic has not disclosed the investor’s identity, reports suggest Lufthansa Group may be exploring a minority stake. Vasks described a strategic investor as crucial for financial support and validation of airBaltic’s growth potential.

The airline’s IPO plans aim to secure additional capital and ensure long-term sustainability. However, delays in negotiations could force the Latvian government to step in with further funding to bridge the gap until the public listing.

Related News: https://airguide.info/category/air-travel-business/private-equity-financial-services/

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