The Polish Government has revived plans to privatise its national carrier LOT, six years after the sell-off was first announced. It aims to raise capital for the carrier and get it into a global alliance.
According to Treasury Minister Alicja Kornasiewicz, a search for a partner is to begin immediately with the view to selling a stake by the end of this year. The ministry is looking for a direct sell to a western partner already in a global alliance but will hold onto its majority stake for at least another 18 months.
"It is not necessary to sell a majority stake yet. It is more important to get the alliances in place now than to sell a majority stake," she says.
British Airways (BA) is favourite for the stake. BA has been extending its route alliance with LOT in recent months and is keen to take a stake in an eastern European carrier to boost its network into Central Asia.
LOT insists, however, that the bidding process will be open and the airline is not focusing just on oneworld. "The relationship [with BA] is quite open but that does not mean that a deal is foreclosed," says Zbigniew Kiszczak, LOT's privatisation director.
Once a partner is found the government will launch a capital-raising program via a share issue. It will sell up to 35% directly to the strategic partner, in a mix of a direct sale of current stock plus an issue of new shares. "The strategic investor will have a dual role," says Kiszczak, "First, to help with the recapitalisation of LOT and second, to improve our performance." Restructuring is underway, he says, although the new partner will be expected to aid the process.
The third phase of the government's plan will involve an initial public offering but this will not happen for two years at least. By then a restriction that insists the government hold a majority 51% could be reversed.
Source: Airline Business
