Latvia's president Edgars Rinkevičs on Wednesday charged the transport minister, Kaspars Briškens (Progressives), with poor communication on the matter, adding that no decision had yet been made on a reduction of over €570 million in the company's share capital.

Latvia's opposition is calling for a prosecutor's office investigation into the company's financial activities.

Talks on airBaltic's future took place during a closed session of the Latvian cabinet, many questions have arisen about what was actually agreed on during Friday's meeting.

The size of the state's remaining share: 25 percent plus one share, is at least clear, but, as revealed in a press conference on Tuesday, other preparations related to the IPO were also talked through.

Reports had circulated in the Latvian media that the airline's share capital would be reduced by €571 million, leaving only €25 million left.

President Rinkevičs said the actual situation was "quite the opposite," and no governmental decision, which could only go ahead if numerous conditions were met, has been made.

"It is also vital to consider that the various financial decisions made to support airBaltic over time are subject to deadlines. Additionally, European Commission requirements have to be met," the Latvian head of state went on.

The share structure is reportedly to be revised, leaving only one category of airBaltic share, while €300 million is expected to be raised from the stock market.

As for taxpayer funds plowed into the airline down the years, CEO Martin Gauss said that this is not what has been keeping airBaltic airborne.

"The €7.2 billion revenue has not come from Latvian taxpayers, but from passengers and other airlines," Gauss said.

The Latvian state has invested €526 million into airBaltic over the past nearly 30 years, he added.

"At the same time, airBaltic has paid back over €400 million to the state in taxes and interest," Gauss went on.

President Rinkevičs said that decision-making processes have however remained "very complex," while communication "has been a complete failure."

"Matters that should have been explained to the public on Friday evening after the government meeting were only communicated yesterday," the head of state went on.

Concerns have been raised about whether the reduction in the state's share will allow direct flights and maintaining the main hub in Riga to continue

Prime Minister Evika Silina has said that the Latvian state's stake must decrease anyway, due to a European Commission decision on the matter several years ago.

Negotiations with a strategic investor are ongoing; an investor which will, Gauss said, "surely be a very positive surprise for many," once announced.

The Latvian government decided last Friday that the airBaltic IPO is to take place before the end of this year. Currently, the Latvian state owns 97.97 percent of the company's shares, and would retain 25 percent after the IPO.

--

Follow ERR News on Facebook and Twitter and never miss an update!