Croatia Airlines plans to withdraw its shares from the Zagreb Stock Exchange, citing minimal trading activity and limited investor interest. Shareholders will vote on the proposal at a General Assembly scheduled for December 7, days after its outgoing CEO, Jasmin Bajić, steps down. The move would end stock market trading in the carrier’s listed shares but would not automatically result in the state buying out all remaining minority shareholders.
Explaining its proposal, the airline said trading had been characterised by very few transactions and low turnover over an extended period. “Given the negligible volume of trading, listing the shares on a regulated market does not fulfil its purpose”, the company noted. Its shares last traded on October 28, closing at 2.40 euros. The Croatian state already holds more than 98% of the airline’s share capital.
Under the proposal, shareholders who vote against the withdrawal would be entitled to request that Croatia Airlines purchase their shares for fair compensation. Such requests would have to be submitted within two months of the decision being entered in the court register, while the airline would have to complete the purchase within three months of registration. The buyer would be Croatia Airlines itself, rather than the Croatian government directly.
Compensation would generally be based on the weighted average trading price during the three months preceding publication of the meeting notice. However, if trading occurred on fewer than one-third of trading days during that period, compensation would instead be based on a fair-value assessment reviewed by an independent authorised auditor. The last quoted share price would therefore not necessarily be the amount paid to departing shareholders.
Minority shareholders who retain their holdings would remain shareholders following the withdrawal, although their shares would no longer be traded on the Zagreb Stock Exchange. There could be an immediate cash cost for Croatia Airlines. The airline would have to fund purchases from eligible dissenting shareholders who request an exit. The amount would depend on participation and the compensation determined. Furthermore, reduced public visibility of the company’s finances are expected once exchange disclosure requirements fall away.
Why does all of this seem to be going from bad to worse?
ReplyDeleteExactly my thoughts.
DeleteSeems that Jasmin will turn off the light
DeleteDelisting itself isn’t necessarily a sign that an airline is in trouble. With hardly any trading and the state owning over 98%, there is a practical argument for it. The concern is how much financial information will remain publicly available afterwards.
DeleteIt is time to seal and close doors for public, OU without huge tax payers funding can't survive and both parties are responsible!
DeleteOnly one Party is responsible and only one gravedigger within it
DeleteAnd don't forget gents, PIR's comments are most definitely not politically driven.
DeleteSo no ladies here, gents only? And you've just disclosed your mindset. Advocating criminal organization which destroys both OU and Croatia is just a consequence of such mindset
DeleteWhat is the logic? My only explanation is that they won't have to post quarterly reports.
ReplyDeleteYes this could be the reason. Results will probably be a disaster next year.
DeleteThere is little benefit in maintaining a listing if investors barely trade the shares and the company isn’t using it to raise capital. Reduced disclosure is a consequence but that alone doesn’t establish it as the motive. It would be useful for OU to say how much it expects to save.
DeleteSmart move, by not being forced to make quarterly reports a lot more flexibility is created. It's no one's business how much the government spends on OU - we can all agree that having a national carrier is in the national interest, period.
Delete“It’s no one’s business how much the government spends” is quite a claim when the money comes from taxpayers. National interest is a reason to demand accountability, not dispense with it. If the case for funding Croatia Airlines is strong it should withstand public scrutiny.
Delete"It's no one's business how much the government spends on OU - we can all agree that having a national carrier is in the national interest, period."
DeleteWhat a slave mentality, unreal.
It's not my business and my money is literally trown out of the window, and for decades now???? With "national" carrier operating planes leased from Irish and American and funneling passengers to Germans and letting all other foreigners have over 85 percent of market share? Are you for real or just stupid???
DeleteWith the state holding more than 98%, the stock exchange listing was hardly giving private investors much influence anyway.
ReplyDeleteThe reduction in financial disclosure is what concerns me. Taxpayers should still be able to see how the airline is performing.
ReplyDeleteThat is most likely the main reason they are delisting.
DeleteInteresting timing. A new management team could arrive and immediately have to deal with buying out dissenting shareholders.
ReplyDeleteSo Peagusa One, which is a stakeholder, will probably get money from OU. lol
ReplyDeleteThat really is hilarious
DeleteThe last sentence says it all.
ReplyDelete+1
Delete+100
Delete+1000
DeleteCould this maybe mean privatization is coming?
ReplyDeleteWho on earth would buy the airline in this state?
DeleteUnited for 1 Euro if they get bit debt free
DeleteThe next CEO has bigger problems to solve than where the shares are traded. This will not improve aircraft utilisation or ticket sales.
ReplyDeleteThe next CEO will most likely be more of the same like Jasmin.
DeleteI'm really hoping the new CEO turns things around.
ReplyDeleteHope is all we have left
DeleteBeing listed never guaranteed good management, just as being unlisted won’t prevent it. The quality of the next management team matters much more.
DeleteAt least the article explains that the airline would pay the compensation. I initially assumed the government would simply buy the remaining shares.
ReplyDeleteAt what cost is the main question?
DeleteThere is a reasonable business argument for delisting but they should commit to continuing to publish detailed quarterly results voluntarily.
ReplyDeleteYeah, that's not going to happen lol
DeleteAgreed. If the justification is that the listing serves little purpose, continuing to publish quarterly results would help reassure people that transparency isn’t being sacrificed. Especially when the public remains the overwhelming owner.
DeleteI would be more interested in hearing the new management’s business plan. Shareholders are being asked to decide whether to stay invested just as the leadership changes.
ReplyDeleteBeing a minority shareholder here sounds like having all the risk and very little say.
ReplyDeleteWhy did they even list on the stock exchange?
ReplyDeleteThey actually first listed in 1992, when Croatia’s stock market was just getting started. The shares were subsequently delisted in 1997 over issues concerning the number of shares and the valuation of former JAT assets, before returning in 2003. A listing gives shareholders a market to buy and sell their holdings, even if the state retains control. Whether it still serves a useful purpose more than twenty years later is a separate question.
Delete^ Thanks for the info! Didn't know that
DeleteDisaster
ReplyDeleteAs much as I love OU, no-one will be wanting to buy shares in them as they lose too much money and you're not going to get a financial return on your investment. It's best the government of Croatia takes 100% of ownership.
ReplyDeletehow many minority shareholders are there?
ReplyDeleteThe public Zagreb Stock Exchange record lists only the ten largest holdings. Those minority holders include JANAF, Zagreb Airport, Hrvatska Lutrija, Pragusa One and individual investors.
DeleteI can understand removing a listing nobody uses. I struggle more with why this has suddenly become a priority.
ReplyDeleteCroatia needs a discussion about what it expects from its national airline and how much it is prepared to pay for it. This decision doesn’t answer either question.
ReplyDeleteAnother administrative change. Still waiting for the announcement that explains how they intend to win more passengers.
ReplyDeleteAnyone finds it odd how this will match the arrival of the new CEO?
ReplyDeleteWell it's not a coincidence.
DeleteIt is not coincidence. It is Criminal Organization. They do everything on purpose and for their benefits only. Unfortunately nobody is Croatia is complaining against it even when we are poisoned and forced to emigrate. Everyone just keep their eyes firmly closed and pretend everything is in perfect order. "Independent investigative journalists" included
DeleteHopefully the cost of advisers, valuations and buying back shares won’t exceed whatever they save on the listing.
ReplyDeleteThey have no money to spare
DeleteThe state already controls the decisions. The useful part of the listing for everyone else was having the reports in one accessible place.
ReplyDeleteWonder whether any minority shareholders will actually turn up and challenge the proposal at the assembly.
ReplyDeleteIf I were taking over as CEO, I would want the outgoing management to explain why this needs to happen.
ReplyDeleteNo Bravo Hrvatska?
ReplyDeleteDon't remind him
DeleteBravo Hrvatska
DeleteBravo OU
LOL
DeleteBravo stupidity at its best
DeleteThey are just trolling.
Deletehope the valuation report will be published. Would be interesting to see how much money they got to give.
ReplyDeleteJust a way to hide the disastrous financial performance and prop up with state aid. They should be ashamed of themselves.
ReplyDeleteThat's a good move to free the hands of Croatian government for anything from any reorganisation, split in various entities or even the sale to some carrier for a symbolic one euro....
ReplyDeleteI know some Germans willing to pay one euro...
DeleteAnd a cheeky Irishman who would be more than willing to close it down.
DeleteThe cheeky Irishman couldn't give less of a f
DeleteIt should be mentioned that their accumulated debt has not reached 194 million euros and will be over 200 million by the end of the year!
ReplyDelete