|Adria in need of fresh funds as liquidity issues arise|
Adria Airways says it is seeking an eight million euro capital injection, a move that is likely to have a strong impact on the carrier's ongoing privatisation process. The Slovenian Sovereign Holding (SSH), which is overseeing the sale of a 91.58% share in the airline, says the capital injection is required in order for Adria to boost its liquidity. "This is in the interest of existing shareholders as well as potential buyers", the SSH notes. It adds that "a closed circle of investors" have been invited to participate in the capital hike. In return, they could be offered shares in the airline, meaning Adria could be privatised via a capital injection, a strategy which has been used in the ongoing sale of the Slovenian tissue maker Paloma.
The SSH revealed in early October it had received several bids for Adria. According to the business daily "Finance", prospective buyers are demanding a write-off of Adria's debt, both financial and operating liabilities. Earlier this week, the Slovenian government said there would be "no hold up" in the airline's sales procedures, while the carrier’s CEO, Mark Anžur, believes the process will be completed in “several months”. Local media report that Adria is facing its biggest financial challenge since 2011, when it successfully negotiated a cash injection with stakeholders, banks and business partners in order to continue operating. The airline recently admitted it is "in need of fresh funds as winter remains a problem due to weaker performance", but added it has "no problems with liquidity".
The Slovenian Ministry of Finance has said it is aware of ongoing liquidity issues at the airline. "The Ministry of Finance is aware of the liquidity problems at Adria Airways. The company cannot be granted state aid to tackle its liquidity issues for another ten years since it has already received restructuring aid", it said in a statement. Adria benefitted from three public capital injections in 2007, 2009 and 2010, amounting to around 15.2 million euros. Furthermore, in 2011 it received fifty million euros worth of state aid. So far this year, the carrier has seen its revenue decline as it plans to sell its remaining assets in order to boost liquidity. It is in the final stages of selling shares in its flight school and Amadeus Slovenia.