4K Invest gives up on Montenegro Airlines
4K Invest, the part-owner of Slovenia's national carrier Adria Airways, has given up on its plans to take over Montenegro Airlines. According to the "Investitor" portal, an unnamed source at the German turnaround fund said, "It is impossible for us to expand our business in Montenegro due to both internal and external limiting factors". They added, "We had contact with government representatives but we do not see a sustainable way to make the company profitable. Debts are a major issue, as well as the current state of the aviation industry, both in Montenegro and abroad".
Montenegro's Prime Minister, Duško Marković, said in October of last year that a German fund was close to taking over the national carrier. The Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, described the German fund as a "major company", which also "owns a carrier". Asked last year whether Adria sees opportunities in cooperating more closely with other airlines from the former Yugoslavia, the Slovenian carrier told EX-YU Aviation News, "We strongly believe in synergies among partners and thus we continuously seek for opportunities. We are always open for closer cooperation, new markets, greater efficiency and faster growth – without jeopardising sustainability. The success of such cooperation depends on more complex factors, so our decisions and future directions are and will be cautious".
4K acquired Adria via its subsidiary AA International Aviation Holding in March 2016 through a recapitalise-and-sell procedure for 100.000 euros and an additional one million euro capital injection. As part of the deal, the Slovenian government provided 3.1 million euros in capital. However, the fund has encountered a number of problems with Adria recently and has been forced to recapitalise the airline with four million euros, while a further ten million euros will be provided by the end of March. Earlier this month, the Slovenian carrier absorbed another company linked to 4K Invest which had previously purchased its brand name, thus changing the airline's ownership structure. Adria is also implementing a restructuring of its business and has discontinued a number of unprofitable routes. The company is expected to post a loss of up to fifteen million euros for 2018.
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