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Latvia holding talks with potential buyers of airBaltic

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Staff Writer | November 2, 2017
Talks are currently being held with three potential buyers of Latvia's national carrier airBaltic but their identities cannot be revealed as yet, Latvian Transport Minister Uldis Augulis said on public television.
Uldis Augulis
Airline   Latvian Transport Minister Uldis Augulis:
What the airline needs is not just a financial investor but someone with a vision for the company's future, Augulis said, adding that the Latvian government stands by its requirements: the airport of Riga must remain the carrier's main hub, the number of airBaltic flights from Riga must not be reduced and the upgrading of the airBaltic fleet has to continue.

The potential investor is expected to provide assurances that airBaltic will stay in Latvia, the transport minister said.

Earlier, the Transport Ministry informed that it was considering concrete proposals from several potential investors interested in acquiring the Latvian carrier. The government did not rule out selling all its holdings in airBaltic.

According to its business plan titled Horizon 2021, airBaltic aims to attract a strategic investor to raise 50 million euros in order to finance the purchase of new aircraft and improve the structure of the company's capital.

The airBaltic management has said the company would not seek additional financial injections from the government, which has set a goal to find a strategic investor for the airline. The government has also hired international financial consultancy Lazard Freres to help find the investor.

In May 2016, airBaltic capital was increased to 256.5 million euros in line with an agreement that had been concluded with the airline's financial investor, German businessman Ralf-Dieter Montag-Girmes who invested 52 million euros in airBaltic. The Latvian government, on its part, provided 80 million euros to the airline's share capital.

After the capital increase, the Latvian government owned around 80 percent of airBaltic shares and a 20 percent stake belonged to Montag-Girmes. In April this year, Montag-Girmes sold his airBaltic shares to Danish businessman Lars Thuesen.