German businessman Ralf Dieter Montag-Girmes, the investor in Latvia’s national carrier airBaltic, has made the promised EUR 52 million investment in the airline, Latvian Transport Minister Uldis Augulis told LETA.
The investment has been made in line with the shareholders agreement signed between the Latvian government and the investor.
Thus, the state and the German investor together will invest about EUR 132 million in airBaltic for upgrade of the fleet and implementation of Horizon 2021 business plan.
airBaltic shareholders will meet at 4 p.m. on Tuesday to decide in increase of the share capital in the company.
The Latvian transport minister is sure that the decisions made on operations of airBaltic five years ago on its further development have been right. The company is promoting the country’s economic growth, employment and offers internationally recognized services to the Latvian residents. airBaltic in the future should continue on implementation of its development plan and attraction of a strategic investor.
“Considering Latvia’s geographic location in the EU, the aviation sector is a strategic transport infrastructure element. Latvia at present does not have any alternative transport connections with other European countries that can be compared to air traffic. Thus, the state has made purposeful investments in the aviation sector, including in airBaltic, as in one of the significant sectors that also promotes development of other sectors, especially tourism,” the minister said.
National airline airBaltic shareholder agreement was signed between the Latvian government and German businessman Ralf-Dieter Montag-Girmes in February. Under the deal, a total of EUR 132 million of fresh capital will be invested in the Latvian carrier for fleet modernization and its new Horizon 2021 business plan.
In November 2015, the government approved the plan to sell 20% of airBaltic to Montag-Girmes for EUR 52 million and agreed to invest a further EUR 80 million in the airline. Under the deal, the German investor will hold 20% of shares in the carrier, while the remaining stake will be held by the Latvian government.
airBaltic, founded in 1995, so far is 99.8% owned by the Latvian state and serves direct flights to about 60 destinations from its home base in Riga.