Latvian Political Monitor

From@tomsneilands

@AndrisVelps @EdvardsSmiltens @Apvienotais_ Smiltēns pleasantly surprises.

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From@AndrisKulbergs

Day No. 71 (Friday) in the prime minister’s seat ✈️—airBaltic: the new, expensive short-term private loan Let everyone be clear. The choice is between saving airBaltic or continuing to be a bad owner without money. As prime minister, I do not want the state to continue being a bad owner. We trust the professionals, the management board, the supervisory board and Kozlovskis. The plan was brought to the government, we approved it, anchored it in law, which provides for it. I have been saying for a month that decisions are in the hands of bondholders. In this loan, the state does not invest money in @airBaltic. The loan is private short-term financing (secured bondholders and a private fund without collateral cover) that gives Transport Minister Kozlovskis (JV), airBaltic management and the supervisory board 180 days to finally put the company in order and attract a strategic investor. 💶 The new loan is expensive because it reflects airBaltic’s real financial situation. It is in fact the last chance to save the company. In 2024, during Siliņa's government, airBaltic borrowed 380 million euros in very expensive bonds. Even then, this money was supposed to serve to put the company in order. But over two years the money was burned—costs were not cut, the number of aircraft/routes was not reviewed, and finances and debts were not put in order. The result is logical: the next money is even more expensive because lenders see the company’s current risk. 📌 Note — the new private loan’s interest rate is lower than the 30 million euro state loan supported by Siliņa's government and PRO in APRIL (without a plan, without a rescue strategy). Why lower? Because this government reduces the government’s role. It effectively removes the risk that the state as owner could behave inadequately. Immediately the market is ready to provide funds for restructuring. My position on airBaltic has been clear for a long time: 1️⃣ airBaltic’s future is now largely in the hands of bondholders, not shareholders. 2️⃣ The state as owner and airBaltic management could have put the company in order while it still had money. Weak cooperation between company management and political leadership also led to the fact that the then IPO plan was not realized. 3️⃣ This created a situation where the company has a weak financial position, but the owner—the state—has no free money with which to save the company. 4️⃣ If the state as owner has neither the resources nor sufficient experience and knowledge to pull the company out of a severe financial situation, then the state alone cannot save the company. (ZZS @ViktorsValainis understands very well and knows that Lufthansa refused and does not want to finance AB) 5️⃣ That is why the airBaltic management board and supervisory board, together with Seabury, have developed a plan to stabilize the company’s financial situation with the help of private financial investors—in principle without state money. 6️⃣ For this plan to be implemented, the state must let professionals work and must not create additional obstacles. This is the plan submitted to the government by Transport Minister Kozlovskis, which the government has accepted and for whose implementation the necessary legal framework has also been adopted. 7️⃣ 💼 Financial investors evidently believe that within six months the company’s finances can be put in order sufficiently for airBaltic to continue its development and attract a strategic investor. 8️⃣ Now Transport Minister Kozlovskis and the airBaltic supervisory board, which represents state interests, must do everything possible in these 180 days to attract a strategic investor for whom Riga is important as the main base. 🇱🇻 Latvia needs an investor who sees airBaltic’s long-term development specifically in Latvia, with its main base and jobs. Ideally, it would be a partner alongside whom the Latvian state could also retain or acquire a stake in the company in the future. 9️⃣ This is now the direct responsibility of the Ministry of Transport, Minister Kozlovskis and the airBaltic supervisory board. I will ask for regular reports on the potential investors approached and progress of negotiations. ⚠️ I am not satisfied with the current pace of approaching investors. We must get it together. These 180 days must not be wasted.

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From@RigasBezceli

No. The Saeima's 'couple of minute votes' are not advantageous. It is advantageous to drag things out for several months, or until circumstances force a vote.

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From@RigasBezceli

@AndrisVelps @EdvardsSmiltens @Apvienotais_ Honestly, without SK there are many, very topical things that need to be cleaned up. That, of course, does not mean that SK should not be denounced at the first opportunity.

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