4K Invest to inject €10 million into Adria


Adria Airways' owner 4K Invest will recapitalise the company with an additional ten million euros after the Slovenian Civil Aviation Agency warned the carrier it needed to provide proof of its liquidity by the end of the year or face penalties. In a statement, the company said, "Fresh capital will make a significant contribution to the continued successful development of the Slovenian airline. Since Adria Airways was acquired by the German 4K Invest fund in 2016, it almost doubled its number of aircraft, hired and trained nearly 200 new employees, expanded its network of flights and become one of the strongest regional carriers operating ACMI services".

Adria's CEO, Holger Kowarsch, said 4K Invest has long-term plans for the Slovenian carrier. "Our plans for Adria are long-term and we want the company to grow and develop in the future. We see huge potential in the company, with our priority being to stabilise our operations and restore the trust of our passengers. There is a lot of hard work ahead of us, but we are confident that we will succeed". He noted that the capital injection would amount to at least ten million euros and will be made by the end of the year.

Mr Kowarsch reiterated this week that Adria's financial loss in 2018 would be "significant" but added that the company will be restructured and placed on "firm foundations". "Slovenia needs its airline, because it is very important for Slovenian society, tourism and economy that a national airline operates from Ljubljana Airport", the CEO told Slovenia's public broadcaster RTV SLO. He added that the company would not file for bankruptcy, contrary to what many apparently wished for. Adria has faced significant operational issues over the past few months, which the airline blames on a crew shortage and technical problems with some of its aircraft. For today, the carrier has cancelled a handful of flights including its planned services from Ljubljana to Warsaw, Munich, Kiev, Sarajevo and Podgorica. Adria's CEO noted that such cancellations would likely continue until December.

Comments

  1. Aaaaaand we have our profit for 2018! Just like a bank loan counts as revenue that's how this will count as well.

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    1. Well in the text it says:

      Mr Kowarsch reiterated this week that Adria's financial loss in 2018 would be "significant" but added that the company will be restructured and placed on "firm foundations".

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    2. Yes and that same CEO will come forward in a few months and say how they are profitable because they restructured the airline, not because they got the cash injection.

      What worries me the most is that they are still struggling and that bankruptcy is a reality. They are lucky ZAG isn't more aggressive otherwise they would be long gone.

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    3. I doubt they will be profitable this year. Unfortunately we will have 3 years of consectuive losses and each year the losses increased.

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    4. They had profit in 2016.

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    5. Fictional profit from brand name sale.

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  2. Another restructuring... didn't one already take place when 4k bought Adria?

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    1. It did. And just before it was bought by 4K it went through another restructuring.

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  3. The number of flights cancelled today is ridiculous

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    1. And it will last until December :(

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    2. They have more cancelled flights than Ryanair with 1/30 of their fleet.

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  4. What is worrying is that Adria is still not profitable after all these years. And I doubt 4K is willing to invest 10 mio EUR every year indefinitely just to keep Adria afloat.

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    1. I think those SAABs will be a disaster for them. The plane might have been cheap to get but they are not very economical, there is a reason why it wasn't popular. But let's wait and see what happens in the end. It would be a shame for JP to go belly up.

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  5. V Podgorico in Sarajevo je skupni let danes

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    1. I guess JU/BEG and JP/VIE will profit the most.

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  6. Good luck Adria

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  7. Well money was never cheaper so they have secured additional funding. I just do not get their strategy - whom they will sell this failed airline?

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    1. How? What is the collateral? Banks are not just giving out money for free.

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  8. 4K Invest is NOT the owner of Adria. The owner of Adria is AA INTERNATIONAL AVIATION HOLDING GMBH that has one employee, the CEO Martin Vorderwülbecke. The company has 25.000 EUR of capital and is owned by 4K Invest which is registered in Luxmenburg.

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    1. Oh please give me a break. That's just a formality. 4k calls itself the owner of Adria and they call themselves a German company. They are only registered in Luxembourg to avoid taxes.

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    2. Dude even in the text 4K said it acquired Adria in a statement

      Read:

      "Since Adria Airways was acquired by the German 4K Invest fund in 2016.

      "

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  9. Wonder which company they will bankrupt now to save Adria. Last year it was Darwin.

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    1. Who cares, as long as it's not from the taxpayers, which it isn't.

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    2. Agree. Private company. They are burning their own money. I'm not too concerned.

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    3. I do worry. Private or not, there are many other companies depending on them.

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    4. Except LJU, who else is really dependant on JP?

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    5. Tour operators.

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    6. People will still go on holidays, even if Adria goes under, with the same tour operator. Except that they will fly on a different charter airline.

      Or am I missing something?

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  10. "He added that the company would not file for bankruptcy, contrary to what many apparently wished for"

    LOL this sounds lika a comment someone would write here.

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  11. So now they saved Adria, next they buy Montenegro?

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    1. We will see for how long Adria will be saved.

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    2. When can we expect the transaction for Montenegro?

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    3. The government said they want to se it by May 2019.

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    4. It doesn't necessarily mean it's 4k invest. Like the article mentioned a few days ago, there are other funds from Germany which specialize is turning around airlines.

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    5. But it was stated that they already own an airline in the region, wasn't it? Which means it ought to be 4K rather than Intro or someone else.

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    6. 07:38

      True, but you have to be careful here, since 4K is mainly living of rumors not facts. They have promised complete overhaul of JP fleet (with Sukhois or CS100s), there were rumors of them flying to Teheran, Dubai, pretty much every city in the EU, long haul etc, they were 'almost signing a contract to buy Montenegro one year ago' etc etc... With the wet lease contracts they are giving an impression of turning the company around, but those contracts were signed before they came - and of course, the numbers speak for itself.

      So 4K is using the media as an advertising board in their quest to offload JP to an unsuspected buyer. Let's first wait and see until Decembre

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  12. This is urgent cash to they can pay off suppliers I think.

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    1. And the millions in compensation they have to pay to passengers for cancelled flights.

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  13. I do wonder what impact the Swiss investigation into Darwin's collapse will have 4K Invest and Adria.

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    1. We can't know what impact it will have on 4k Invest because we know absolutely nothing about 4k invest.

      Look at thir website. It consists of a total of 100 words. There is nothing.

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  14. If 4K is struggling with Adria, why don't they just sell it?

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    1. I doubt anyone is interested.

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  15. Seeing that Adria is having problems, I hope more foreign carriers see this as an opportunity to launch flights to LJU.

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  16. 4k has failed in its promise. They came to Adria saying they would turn around the business. That they are turnaround specialist. It turned out they are now planning a second (in reality third) year with a loss and it increases each year.

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    1. What did you expect? The company that bought Adria has no experience in managing airline.

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  17. At least passenger number are improving

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  18. First of all, they are using future tense - let's wait and see if they come true with the promise. Until now, they haven't invest one euro of their own money into the company, so I'm highly doubtful.

    Second thing is, they will not be able to bluff their way through this as they did last year with fictitious brand sale. The main problem JP has is not CAA but suppliers - CAA will never ground its fleet, but the suppliers can do it in a heart beat if they determine that the level of lies coming from the management has reached the critical level.

    But what worries me by far the most is this statement:

    "He added that the company would not file for bankruptcy, contrary to what many apparently wished for."

    No CEO would ever say something like that, unless the company is on the brink of bankruptcy. I mean, if the fuel suppliers pull out next week and their fleet is grounded, Kowarsch can simply say 'We had the money ready, but the suppliers, journalists, public, communists etc are to blame for the bankruptcy, we had the money ready.'

    With the number of cancelled flights we are seeing, I think they can go under any day now.

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    1. One of the most insightful and realistic comments in a while here.

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  19. I like their optimism.

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  20. Let's not forget, they first called CAA letter fake news, stating it's just an ordinary inspection, then that they have enough funds, and now suddenlynsfter "fake media news" they are planning a cash injection.

    This is going to end up very badly very soon.

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    1. Haven't really followed the news in the past few days; could you link where they called it fake news?
      Thx...

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    2. https://www.adria.si/en/news/adria-airways-official-statement-about-media-reporting-on-its-business/

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  21. I think that there is something "fishy" about this "investment". Which private company would constantly pour money in a bucket with a hole? Especially an investment fund that is looking for a quick return! We can see that private investors just pulled the plug in Cyprus with Cobalt after only two years of heavy losses....There must be deal behind the curtains with LH and politics. I miss Purger with his comments

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  22. Still insist that JP must try long haul routes.
    Get A321LR - perfect for Canada and US.

    Can be used to offer exotic charters too.

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    1. 1. A321LR will probably not go with full load from LJU for TATL flights.
      2. A very small financial issue. Not a problem at all when you want to buy or lease brand new aircraft.

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    2. Adria with the current financial status and credibility will never get ETOPS and Security Clearence. The company is not able to keep their current network solid, neither have money to open a long-haul route.

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  23. I have a flight with them end of november LJU-SKO, hope they survive until then ��

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    1. I didn't know JP flew to Sokoto in Nigeria. What plane are they using, a CRJ? :O

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  24. LH is consolidating regional operations through 4K. JP and YM planes will fit in Cityline portfolio.

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  25. Rezervni djelovi za Airbus su nam nephodni za daljnji rad i 10 miliona eura je malo.

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  26. Odrzavanje Airbus aviona je veoma skupo ove godine,cjena servisnih usluga i djelova je veca za 11% u cjeloj europi.

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  27. Just a few facts. Recapitalization does not mean direct intake to cash-flow but rather increasing the capita of the company. Pure accounting. Remember the case of Skywork, when recap happened a few weeks before the grounding. Pure accounting to misslead the regulator.
    Money, does not necessery mean success. With 10mio you may maintain the status quo of JP thru the next Quartal. Keeping in mind very same people had 18mio on the account of an airline they took over (F7), and grouned it in 4 months.
    The seeds of the situation are however again, in the Republic of Slovenia who wanted by whatever to get rid of national airline with more than 50yrs of history as part of the last chapter of privatisation in Slovenia. They sold a company to investent fond without any credebility. For peanuts. I'm sure that if the same economical standards would apply in Slovenia than Switzerland, this take over would be already under the criminal investigation.
    Reffering to the interview Kowarsch had on the RTV SLO last Wed shows, he has no clue what he is talking about. He acts like a little boy who has no clue how he came to that position in the company. Even more shocking are statements given by Slovenian CAA Director. Discussing publicly about the audit findings and status of a -practicaly the only airline in the state- by him, in case of FOCA, LBA, ENAC, DGAC or AESA, that would be his last day in his office. Absolutely unprofessional.

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