Slovenia has approved plans to inject capital into Adria Airways, while at the same time selling a 91.58% stake in the company, the government said in a statement. The capital hike will take place on Tuesday, January 19. "The sale of Adria Airways along with the capital injection by the Republic of Slovenia will result in fewer costs for the state than a potential bankruptcy or an establishment of a new airline", the cabinet said yesterday. The government added that a private investor would also participate in the capital injection and subsequently buy the company in order to meet European Union state aid rules. "The recapitalisation by the state and subsequent privatisation will ensure the survival and development of the Slovenian flag carrier and is expected to bring other positive effects, such as added tourism revenue", the government noted.

According to local media, the state will inject some three million euros into Adria, while the German investment fund 4K Invest, which specialises in acquiring medium and large-sized companies with a poor operating performance, will provide another two to five million euros and buy the Slovenian carrier for one euro. Adria Airways 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. In 2014, the European Commission concluded that the aid was compatible with its 2004 guidelines on state aid for the rescue and restructuring of companies in difficulty. Last year, Adria said it was seeking eight million euros in fresh capital.

4K Invest is believed to have drafted an agreement with the Slovenian government during the week concerning Adria's acquisition. The capital raised next Tuesday will be used for restructuring, which will likely result in a new business model for the Slovenian carrier. Under the leadership of CEO Mark Anžur, in 2014 Adria developed a six-year business strategy which has seen the carrier transition from a full fare into a hybrid-model airline. Furthermore, the strategy has seen aggressive expansion, with the company launching new bases in Lodz and Tirana and strengthening its market position in Pristina. Adria has already announced the launch of three new routes for this summer season, but also suspended services to Istanbul on January 1. Late last year Mr Anžur said, "We are developing our own strategic plan, which can be supported or not by the new owner". Adria reported its first net profit in seven years in 2014 but is believed to have swung back to losses in 2015. It is expected the new German owner will have a more productive partnership with Adria's hub airport in Ljubljana, operated by Germany's Fraport. Changes in the airline's ownership structure will not impact on its commercial and operational alliance with Estonia's Nordic Aviation Group, which is expected to last until the end of the year.