According to the company, the purpose of the financing is to strengthen its liquidity and ensure the financial resources needed to implement the new business plan.
To obtain the planned financing, approval from bondholders and airBaltic shareholders is still required.
A bondholders’ meeting, where the relevant proposal is planned to be discussed, is convened for September 11.
According to the airline, it is expected that, upon receiving the necessary permits and fulfilling the remaining conditions, EUR 180 million will be available shortly after the bondholders’ consent is obtained, and another EUR 77 million – upon fulfilling additional conditions.
Interim financing is planned to be raised by issuing new bonds, which will be redeemed on February 26, 2027, and have an annual interest rate of 25%.
In the airline’s statement to the stock exchange, it is noted that new, more senior bonds amounting to approximately EUR 257 million are planned to be issued, guaranteed by the London investment management company Polus Capital Management and the Israel-registered investment company Klirmark Capital 4.
Existing bondholders, including the Latvian state, will have the opportunity to participate proportionally in the new issue.
airBaltic’s chairman of the board, Andrejs Martynovs, explained to the LETA agency that investors are ready to provide interim financing of up to EUR 257 million, and all existing bondholders will have the opportunity to participate proportionally to the amount of bonds they hold.
“This is not a mandatory requirement, but an opportunity that bondholders can use. This also applies to the Latvian state,” said A. Martynovs.
The attracted financing is planned to be used to refinance existing obligations related to aircraft and engines, as well as to cover current expenses, including repairs, maintenance, and airport fees.
Commenting on the interest rate, A. Martynovs noted that this is the best airBaltic can currently get, as such financial instruments – short-term interim financing – are more expensive than other types of financial instruments.
In its statement to the stock exchange, airBaltic once again confirmed that the flight schedule will be carried out as planned and no disruptions are expected.
The proposed financing is part of broader measures being taken to strengthen airBaltic’s financial position and implement the new business plan.
At the end of August last year, the German aviation giant Lufthansa became a shareholder of airBaltic. Currently, the Latvian state owns 88.37% of airBaltic shares, Lufthansa – 10%, the company Aircraft Leasing 1 owned by Danish businessman Lars Thuesen – 1.62%, and other shareholders – 0.01%.
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