Aegean, Air Nostrum submit non-binding bids for Croatia Airlines

Greece's Aegean Airlines and Spain's Air Nostrum have submitted the two non-binding bids for state-owned flag carrier Croatia Airlines [ZSE:CRAL], local media reported.

Croatia Airlines said that the financial advisers it has hired, Privredna Banka Zagreb (PBZ) and DVB Bank SE (part of Germany-based DZ BANK Group), have completed the preliminary phase of exploring investor interest in its planned capital increase, receiving two non-binding bids from unnamed companies.

According to unofficial reports, the two offers were submitted by Aegean and Air Nostrum, as there have been speculations that international financial institutions and local investment fund managers also participated in the competition but their proposals were not good enough to go through to the next stage, news daily Jutarnji List reported on Wednesday.

The two bids will be now analysed in detail by the financial advisers and then sent to Croatia Airline's management for approval, the report said, adding the final say will rest with the government in Zagreb.

Jutarnji List recalled that Aegean had shown its interest in Croatia Airlines already in 2015 when the Croatian government engaged the International Finance Corporation as an adviser on the planned privatisation. Back then, Aegean entered the second stage of negotiations led by the IFC but the process ended inconclusively with the change of government in Zagreb.

This time, the government in Zagreb picked in April the PBZ/DVB Bank SE consortium to provide consultancy services for the planned recapitalisation of Croatia Airlines, as well as to help the company identify possible strategic partners.

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In September, the government decided to provide the airline with 250 million kuna ($37 million/34 million euro) of fresh capital, aimed at helping it stabilise its operations ahead of the planned recapitalisation. The funds are intended to finance aircraft repair, repay overdue debt to domestic suppliers, settle credit liabilities and make necessary investments in the coming 12 months.

Later the same month, Croatia Airlines received the first 100 million kuna of the pledged state aid.

Transport minister Oleg Butkovic said in September that the best possible recapitalisation method should be chosen by the end of the year, with the aim of launching the recapitalisation process by June 1, 2020 at the latest.

Croatia Airlines' consolidated net loss widened to 48.4 million kuna in the first nine months of 2019, from 34.4 million kuna in the like period of last year. The airline transported 1.702 million passengers in the nine months through September, down 0.1% on the year.

The Croatian government controls a combined stake of almost 99% in the airline.