airBaltic's reduced share capital does not impact the company's overall worth, according to the prosecutor's statement.
In a significant move, airBaltic has undergone a reduction of its share capital, a decision that aims to restructure its equity base and improve its financial position. This process, which involves reducing the nominal value or the number of shares, has various implications for the airline and its stakeholders.
One of the key benefits of this reduction is its potential to improve the financial situation of airBaltic. By allocating the difference in the value of the shares to cover losses, the airline can clean up its equity structure and optimise its capital structure. This move is expected to assist in the exit from state aid conditions, a crucial step towards financial recovery.
The state's shareholding in airBaltic is also affected by the share capital reduction. The exact numbers are not detailed, but such reductions often lead to a proportional decrease in state shares or direct conversion to accommodate new investments. For instance, the 10% stake acquired by the Lufthansa Group for €14 million, planned to close in August 2025, is part of this process.
The reduction of share capital is a key step towards enabling airBaltic’s exit from state aid. By restructuring equity and capital, the airline demonstrates improved solvency and aligns with EU state aid rules to prevent market distortion. The capital cut can partly serve to wipe out accumulated losses or to rewrite the balance sheet to make the company more financially viable and attractive to private investors.
Recent financial reports show that airBaltic's financial situation has significantly improved. The airline recorded reduced net loss (from €–88.8 million in the previous year to €–1.7 million in H1 2025) and record revenues, signalling strengthened financial health despite previous debts and challenges.
It is worth noting that the Prosecutor General's Office has confirmed that the reduction of share capital is not diluting the value of the airline or the number of shares held by the state. The Government's decision to support the reduction of share capital was also concluded as being within its competence by the Prosecutor General's Office.
In conclusion, the share capital reduction in airBaltic is a strategic move aimed at improving the airline's financial health, reducing the state's direct control or ownership stake, and supporting compliance with requirements to exit state aid programs. This enables strategic new investments, like the Lufthansa stake, to enter without state aid restrictions, enhancing operational flexibility and growth prospects.
- The government's decision to reduce airBaltic's share capital is expected to help the airline exit from state aid conditions, a critical step towards financial recovery.
- The share capital reduction will not dilute the value of the airline or the number of shares held by the state, as confirmed by the Prosecutor General's Office.
- The EU state aid rules require companies to demonstrate improved solvency, which airBaltic is doing by restructuring its equity and capital through the share capital reduction.
- The reduction of share capital allows for new strategic investments, such as the 10% stake acquired by the Lufthansa Group, to enter without state aid restrictions, enhancing operational flexibility and growth prospects for the airline.
