Etihad lifts stake in Air Berlin to 29%
United Arab Emirates airline, Etihad, is to pay 72.9 million euros ($95 million) to become the biggest shareholder in Germany's second-largest airline, Air Berlin, the German group said on Monday.
Etihad, which already held 2.99 percent in the German carrier, is to buy 31.6 million more shares in a capital increase, thereby raising its stake to 29.21 percent, Air Berlin said in a statement.
The new shares are being issued at a price of 2.31 euros apiece.
Air Berlin, which is strapped for cash after growing rapidly over the last few years and piling up debt as it ordered dozens of planes, said the increase in Etihad's shareholding would cement a strategic cooperation agreement between the two airlines that would include extensive code-sharing.
As part of the cooperation, Etihad "has undertaken to arrange for a debt financing totalling $255 million" for Air Berlin, the statement said.
At the same time, Etihad had pledged to keep hold of its shares in Air Berlin for at least two years, but would not seek to increase its holding any further or launch a public takeover offer for the German group, Air Berlin said.
Air Berlin chief executive Hartmut Mehdorn said: the partnership with Etihad would "become our new gateway to Asia and Australia."
© 2011 AFP