State to recapitalise Croatia Airlines
The Croatian government plans to adopt measures today to inject much needed funds into the national carrier. The state last recapitalised Croatia Airlines in 2013 with 106 million euros, just before the country entered the European Union. As a result, the company was forced to restructure. Under EU regulations, the state is barred from providing further financial assistance to the airline over a ten-year period. In Croatia Airlines’ case until 2023. However, the Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said, “The government has managed to find a suitable model which will enable recapitalisation. We will inform the public of the details on Thursday following a session of the government”. The government is expected to begin its sitting at 09.30.
The Croatian Prime Minister, Andrej Plenković, said this week, “The government has decided that Croatia needs a national carrier. On Thursday we will adopt plans to recapitalise Croatia Airlines”. The company's CEO, Jasmin Bajić, previously noted the airline needed 33 million euros. "The situation is not good because we cannot develop. Currently, we can only stagnate and shrink. Therefore, we need a new investment cycle and capital which is why the ownership structure should change through recapitalisation. This will not be a sale in the traditional sense, rather a recapitalisation for the sake of development", Mr Bajić said in February.
Croatia Airlines posted a net loss of 12.1 million euros during the first half of the year. The carrier recently selected a consortium made of the Privredna banka Zagreb and Germany's DVB Bank to act as its privatisation advisors. During the ongoing initial phase of their work, the advisors are analysing Croatia Airlines' business and results. The second phase will involve identifying the best privatisation model, while the third will include the transaction itself. Transport Minister Butković previously said, "The company's privatisation process should be completed by the end of the year, and I believe we will deliver within the set timeframe".
This news item will be updated during the day.
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