Julian Moxon/Paris
British Airways appears to have come a step closer in its bid to take over ailing French independent carrier Air Liberte after the unexpected withdrawal of a competing offer from a consortium led by French travel group Nouvelle Frontieres. One of the consortium members, the Banque Rivaud, has now joined the BA bid.
Nouvelle Frontieres president Jacques Maillot apparently decided at the last minute that a stake in Air Liberte, which has heavy debts and lost Fr650 million ($130 million) in the first nine months of 1996, would be too risky. The company had joined with Royal Air Maroc and Banque Rivaud to make an offer, which would have given the bank a 60-70% controlling share in the airline.
BA originally offered just Fr25 million for Air Liberte, which filed for bankruptcy on 26 September, backing up the offer with a promise to invest another Fr440 million on the airline following the sale. Now, Banque Rivaud, which is one of Air Liberte's creditors, has agreed to add Fr190 million to the UK offer, bringing the total to Fr630 million. This would give BA a 70% controlling stake in a reconstituted Air Lliberte, and Banque Rivaud 30%.
Although BA's position has been strengthened by this latest move, it still faces competition from its old adversary Richard Branson, whose Virgin Express promises to step up its own bid for Air Liberte.
Under the new BA/Banque Rivaud agreement, Air Liberte would be run by Marc Rochet, chairman of TAT European Airlines soon, to be a fully owned BA subsidiary. "We expect to persuade the Air Liberte judicial administrators to allow us to put our rescue plan in place immediately," says BA chief executive Bob Ayling.
He adds that the "serious offer" would preserve 1,250 jobs, retain 13 out of the 15 aircraft and all domestic routes, including those to the French dependencies in the West Indies.
If successful, BA would emerge with a strong presence in France, controlling of 22% of the domestic slots at Paris Orly.
The public share offer launched by Nantes-based Regional Airlines has been 41 times oversubscribed, reaping orders for 5 million shares. The offer was for only around 120,000 shares, representing nearly 11% of the profitable French regional carrier. At a final price of Fr270, the offer netted Fr33 million in new capital.
Source: Flight International
