We assisted the Ministry of Transport and the Latvian state in signing an agreement with Lufthansa Group, a strategic investor in airBaltic. According to the transaction documents signed, Lufthansa Group will acquire a convertible share representing a 10% stake in airBaltic, which will be issued at a subscription price of EUR 14 million. Additionally, Lufthansa Group will receive a seat on the airBaltic supervisory board.
About the deal
The convertible share will be converted into ordinary shares upon a potential IPO of air Baltic. The size of the stake will be determined by market pricing of the potential IPO, with Lufthansa Group’s share amounting to at least 5% of airBaltic.
The transaction builds on the existing wet-lease agreement between Lufthansa Group and airBaltic and intends to strengthen airBaltic’s role as a strategic partner of Lufthansa Group. Expanding this commercial cooperation will allow Lufthansa Group to improve the quality of its network and add additional markets.
The deal also provides airBaltic with additional funding and supports its growth plans, which include expanding wet-lease agreements. It also recognises airBaltic’s leading market position and unique hybrid business model.
The closing of the transaction is planned for the second quarter of this year and is subject to antitrust review.
Our team and involvement
Our team, including managing partner Eva Berlaus and counsel Renāte Purvinska, advised the client on all legal matters related to the transaction, including working on the transaction documents, assisting in negotiating the transaction agreements and assisting the ministry in preparing other legal documentation to ensure successful signing of the transaction.
