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| 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.
Comments
Jat was certainly more than just an acronym. Among people in the diaspora that I know, Jat simply means a domestic airline. I don't think I have heard my parents ever say Air Serbia, despite them flying with ASL, they always just call it Jat.
And I think overall, Serbia as a brand is much more disliked than Jat ever was. Of the Americans I know, most either don't know that Serbia exists, or they have negative feelings.
Overall I feel like ASL should have put much more emphasis on Ex-Yu, Romania, Bulgaria, and Greece, and I think that an overhauled Jat brand would be more successful there than Air Serbia is.
And when I say overhaul Jat as a brand, I mean an entirely new and professionally done identity, with an entirely different image.
And if Adria urgently needs 8 million and receives only 4, what will the new owner do about the remaining 4 million? Will they borrow it somewhere or will they try to cut costs for that much?
This leads us to one more details which is further expansion. Does any of these investors have any funds to invest into expansion and growth? Looking at their overview provided by admin, I somehow doubt it. They are likely to seek profits first and fund any new routes from Adria's profits rather than their own pockets. So what will happen if any of the existing routes turn nonprofitable?
Good luck to Adria and I hope some money will appear in this deal ultimately, because currently I can hardly see any of it.
what bothers me about Slovenia's privatisation process is that they always declare in advance who they'll sell it to. Maybe they could get more money if they negotiated with all the potential buyers.
Its actually a very common story and legal because the investment funds never cover up or hide the financial state of the company but sell a real good story.
For example, lets say their total investment in Adria was 5 million Euro's and after tiding up and cutting costs they float the company with a market cap that includes all of Adria's assets.... Could be with land aircraft slots etc 100 million Euros. Not bad but for the investment fund.... sucks for the poor buggers that bought the shares.
I hope this does not happen with Adria so I would really not want to see it as an option for Croatia Airlines.
I wish Adria and especially their employees all the best. We talk about routes and brands but IMHO saving jobs is what matter the most.
Now that just my assumption based on what I have read from different news articles etc over the years.
Stakes will be on it's account on 20th April
http://www.exyuaviation.com/2014/08/serbia-unveils-etihad-contract.html
Furthermore, Air Serbia has not published its official profit margins for 2015.
Judging by this miniscule capital injection, investment is just to shore up cash reserves and make sure they can operate until the big changes take place. What are they going to transform it to is a big question. We know it can’t survive as a legacy airline, transforming it to LCC might be an option but that market is very crowded with some big players in the neighborhood. I see them as a much smaller company providing mainly charter and service like what they are doing in Estonia plus some LH feed. At the end of it all, fund will keep it for 3-4 years. If at that time they can’t sell it, they’ll just sell assets trying to recoup their investment and move on.
- 100.000 EUR
- pri čemu 4K daje 1 milijun EUR investicije
- država daje 3,1 milijun
zapravo to znači da
- Država nije dobila ni lipe
- dala je kompaniju đabe
- i još mora dati 3 milijuna EUR da ju 4K preuzme (3,1 milijun - 100.000 od 4K)
Kolika je vrijednost Adrije? Ima li Adrija ikakve imovine?
Zašto je država učinila ovako što?
Jel stanje u Adriji toliko očajno, da je država platila da netko drugi preuzme vruči kumpir, pa bude evenutalno odgovoran za njeno zatvaranje ako ne uspije Adriju staviti na profitabilan put?
Jel zna neko dali ce ADR ostati u Star Alijansi i dali ce ostati ugovor sa Estoncima posto je ipak drugi Gazda sad
INN-NS
To je bilo i moje pitanje. Investitor je dobio Adriu i svu njenu imovinu. Ako im je cilj "očistiti" je i zatim preprodati, verovatno će dobro zaraditi na toj prodaji. Pitanje je zbog čega država to nije učinila već čišćenje uvek mora obaviti neko drugi a država onda ostane bez centa zarade.
INN-NS
They don't like it and they are reducing flights.
Both travelers and taxpayers are loosing out.
YU-APA and YU-APG are to be done until end of winter timetible.
Best wishes from Basel
Ali dobro je za zaposlene sto su nasli novog kupca.
INN-NS
I came across this brilliant video by Emirates! What an innovative and fun way to promote your business. :D
https://www.youtube.com/watch?v=jAF2hZxdFRE&feature=youtu.be
JAT as JAT Yugoslav Airlines had certain cache among flying public of the past but that brand has been effectively abandoned ages ago. They tried to revive the JAT spirit with those lovely commercials featuring Vesna Trivalić & Co. but the product itself remained subpar on so many levels.
Perhaps the previous managements could have developed JAT as a brand (similar to KLM) but sadly, none of them tried.
I tend to be emotional as well but reality stepped in when I compared my Jat Airways flights to Paris and Berlin in 2011 and the same flights I took in 2014/2015 on Air Serbia.
If I recall well, that was one of the publicity stunts in build up to the introduction of their second daily flight to Lisbon. Emirates will also remain Benfica's main jersey sponsor until 2018.
Small national airlines that are awaiting privatization are a dime-a-dozen. Personally I wouldn't give a cent of my money for Adria because these airlines are money pits.
When foreign carriers reduce capacity they simply do it because they lose some passengers to their local competitor and find themselves in overcapacity. They reduce capacity to reduce costs, not because they want to protest. And when the local carrier loses some capacity they again decrease their own. Pure business. And very simple - unless your brain boils in hate.
This also applies to all other destinations. Now, some airlines outsmarted them (Lot, Aegean...) while some others didn't.
Despite not paying anything to the airport, JU still managed to suspend two routes, not launch two announced and to get totally beaten by Lot to WAW, by SU to SVO and they will most likely suffer quite a bit when W6 launches Baden Baden.
All in all, JU has a decent enough product but it still fails to win a battle against another legacy carrier, it's been two years since Adria suspended BEG. For me it's incomprehensible how they managed to shrink their operations at such time. What can we expect when they start paying their fees? Will their be even more cuts? I highly doubt that it's then that they will start rapidly growing.
+1000