Lithuania's troubled FlyLAL sold to Swiss investors

12th January 2009, Comments 0 comments

It is believed that Swiss Capital Holdings paid CHF 1.12 million for the flag carrier.

VILNIUS – Lithuania's troubled flag carrier FlyLAL, which has been seeking a suitor for months, announced on Friday that it had been sold to the Zurich-based group Swiss Capital Holdings.

"The contract for the acquisition of 100 percent of the shares was signed today," FlyLAL spokeswoman Gintare Rimkuviene told AFP.

"It will come into force on 23 January," she added.

Rimkuviene declined to give details of the sum involved or the terms of the contract.

The Lithuanian news portal Delfi, which is considered well-informed, said sources had told it that the airline's price tag was USD 1 million (CHF 1.12 million).

In addition, Delfi said, EUR 1 million would be paid to Vilnius' international airport, to which FlyLAL is in debt.

FlyLAL confirmed that talks with the Swiss investor had begun late in 2008 and that the goal was to maintain the carrier's status as a regional airline.

FlyLAL is the market leader in Lithuania, a Baltic state of 3.4 million people.

The company increased its passenger numbers by 52 percent in 2008 but has nonetheless been struggling.

Arunas Staras, Lithuania's deputy transport minister, last month blamed tough competition from airBaltic, which is based in neighbouring Latvia, as well as the effects of high fuel prices and the global financial crisis.

FlyLAL was privatised in 2005, with Lithuanian groups ZIA Valda, Indeco, Sanitex and VA REALS holding stakes of 40.73 percent, 27.15 percent, 22.63 percent and 9.49 percent respectively.

In 2007, it posted a loss of 8.1 million litas (CHF 3.52 million) on revenues of 262.9 million litas.

FlyLAL's debts are currently around 89 million litas.

In an attempt to tackle its financial problems, FlyLAL at the beginning of this year suspended direct flights to France, Italy and Turkey.

In December, the airline had sought government aid, proposing to sell the authorities a 51-percent stake for a symbolic one litas but the transport ministry rejected the idea.

[AFP / Expatica]

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