Struggling Lithuanian carrier FlyLAL is being acquired by Swiss investment fund SCH Swiss Capital Holdings under a deal which is expected to be finalised on 23 January.
FlyLAL says negotiations with SCH began late last year, culminating in today's agreement which covers 100% of its share capital. It is expecting to conclude the deal later this month, once some outstanding obligations have been completed.
It says SCH is a strategic investor which wants to develop FlyLAL as a European regional airline. SCH chairman and CEO Jan Erik Jansson says FlyLAL's reorganisation and activity plan will be prepared during next few weeks.
Last month FlyLAL - which was privatised four years ago - approached Lithuania's ministry of transport and communications, proposing that the state should take a 51% stake for the token price of a single Lithuanian litas.
At the time FlyLAL said it had LTL89 million ($34.8 million) in uncovered debts and noted that it had secured LTL3 million from its shareholders to safeguard operations over the holiday season. The proposal and associated action plan, subsequently rejected by the government, were aimed at rescuing the airline and restoring its profitability by 2010.
FlyLAL chief Vytautas Kaikaris says: "We considered different scenarios for FlyLAL to continue operations and searched for potential investors to support the business plan prepared for the future.
"[SCH] conducted a thorough analysis of the situation in the aviation market and business prospects of FlyLAL. We can assure our passengers and partners that FlyLAL continues its operations as usual."
FlyLAL names its existing shareholders as ZIA Valda with 40.7% of its capital 27.2% shareholder Indeco Investment and Development Sanitex which holds 22.6% and VA REALS with 9.5%.
Source: Air Transport Intelligence news
