|World Bank affiliate to manage Croatia Airlines’ privatisation process|
The Croatian government has formally selected the International Finance Corporation (IFC), which finances and provides advice for private sector ventures and projects, and is also a member of the World Bank Group, to find a strategic partner for Croatia Airlines by the end of the year. Last October, the government formally relaunched the airline’s privatisation process, following a failed attempt in 2013, and appointed a commission to handle the sales procedure. As an external consultant, the IFC will seek out potential investors and report back to the commission. Croatia Airlines’ CEO, Krešimir Kučko, believes the carrier is better prepared for its second privatisation attempt. “Croatia Airlines has been operating with a profit for a second consecutive year. For the first time in our history, we will post a profit of over one million euros”, Mr. Kučko says. He adds, “A partner can expect to find a well managed company that has high standards and is very well situated on the market. I still claim that we are a regional leader. Our business is transparent”, he adds.
The IFC guarantees it will be able to find Croatia Airlines its new owner within a year. The Corporation has a strong presence in the Middle East and China, where the government hopes to find a strategic partner for the carrier. The IFC is already active in Croatia and has invested nineteen million euros in Zagreb Airport’s new passenger terminal. Furthermore, the Finance Corporation has an 18% stake in the holding firm Zagreb Airport International Company (ZAIC), which runs Croatia’s busiest airport, and has provided a loan of 35 million euros for the construction of the new terminal. IFC will first screen Croatia Airlines and its buisness, after which the government will offer the company’s shares through a public tender.
The Croatian government foresees for a company from the European Union to acquire a majority stake in Croatia Airlines but those from outside the bloc will be limited to a 49% share. It anticipates for the new owners to invest funds into the carrier, modernise its fleet, expand its route network and market share, further develop its profitable maintenance division and support the development of Zagreb Airport. Meanwhile, a planned strike by Croatia Airlines’ pilots, cabin crew and maintenance staff has been averted after the management and unions representing the carrier’s employees agreed to the terms of a new collective agreement. Late last month, unions issued a strike warning after the first round of talks with the management failed.