Minister Negotiates With SAS Over Investment in Estonian Air

22.11.2011 15:32
Category: Economy

Minister of Economic Affairs Juhan Parts has proposed that SAS should follow the state's lead in making substantial investments into revamping Estonian Air.

Because the state is planning to inject 30 million euros into the airline over the next two years, Parts said that SAS Group, which is a 10-percent owner in Estonia's flagship airline, could make a proportional contribution, reported e24.ee. He was, however, unwilling to go into details saying the negotiations were still going on.

SAS Vice-President Sture Stolen however said that it is unlikely that his company would be opening its wallet anytime soon.  

"We have a good and important partnership with them, but it is not our strategy to be part owners in Baltic airlines," he said.

An alternative option is that SAS could write off part of the loans it has made to Estonian Air, whose debts totaled 7.3 million euros at the end of last year. Stolen said he did not rule out that possibility.

SAS acquired a 49 percent stake in the company from Maersk Air in 2003, but reached a deal with the government last year to sell the bulk of its holdings. The government has an option to buy SAS's remaining 10 percent until 2014.

 

Steve Roman


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