|Adria Airways finds buyer and secures capital injection|
The German investment fund, 4K Invest from Munich, has signed a contract for the purchase of a 91.58% stake in Adria Airways at a price of €100.000. The new shares will be distributed by April 20, after which the German fund is to complete the acquisition pending regulatory approval and the implementation of a series suspensory conditions. Details of the conditions were not immediately available. Furthermore, the airline's shareholders approved a capital injection amounting to 4.1 million euros, of which one million will be provided by 4K Invest and the remaining 3.1 million by the Slovenian government. 4K Invest specialises in acquiring medium and large-sized companies with poor operating performance. It aims to establish real value creation through systematic restructuring. Although it has so far restructured over 200 companies, Adria becomes its first airline venture. The Slovenian government has managed to sell its biggest assets in the aviation sector, with Ljubljana Jože Pučnik Airport operated by Germany's Fraport, and the aircraft maintenance company, Adria Airways Tehnika, now run by Poland's Linetech Holding.
Speaking at today's extraordinary shareholders' meeting, where a vote on the capital injection was taking place, Adria's CEO, Mark Anžur, said the company recorded a net loss of some five million euros in 2015, following its first profit in seven years in 2014. Mr Anžur is confident the airline will post a three million euro profit this year, fuelled by its contract with the Estonian government to provide commercial and operational support to Nordic Aviation Group. The Slovenian Sovereign Holding (SSH), which is overseeing the airline's privatisation process, says Adria will have to carry out additional measures to insure liquidity despite the capital injection. However, the SSH noted that Adria will essentially preserve its existing business model. "Adria Airways will continue to focus on the Slovenian, Albanian, Kosovan and Macedonian markets. It will operate with modern aircraft and offer global connection through the Star Alliance network. Adria will continue to develop a hybrid business model. The new buyer will renew the airline's fleet and grow its network. Adria will continue to offer services in Estonia as part of its existing obligations", the SSH said.
Today's vote marked the culmination of Adria's second privatisation attempt, after an international call for bids published in August 2012 failed. Back then, a total of ten parties submitted non-binding offers, although the bidders were never publicly revealed. However, it is believed that Welcome Air, a small Austrian-based airline operating two turboprop aircraft and the Dutch company Panta Holdings, which in 2012 purchased the German airline OLT Express (which has since gone bankrupt), were among the bidders. Also rumoured to have been interested at the time was Germany’s Intro Aviation. Unlike two years ago, Adria is no longer under investigation by the European Commission for receiving state aid.