airBaltic bondholders approve bond amendments as airline pursues financial rescue

Bondholders of airBaltic have voted to approve changes to the terms of the airline's outstanding €380 million bonds, which carry 14.5% interest and mature in 2029. The resolutions followed a notice issued in late July.

Under the approved terms, interest payments originally due in August and November of this year will be added to the bonds' principal instead of being paid out to holders. Bondholders also agreed to waive a minimum liquidity requirement temporarily, until mid-November. They eased some conditions tied to a bond service reserve account, too, and adjusted the notice and quorum rules that will apply to future meetings.

The vote succeeded after holders representing more than a quarter of the outstanding bond principal took part, with over three-quarters of those voting in favor. Other financing matters weren't addressed at this meeting; they simply weren't on the agenda.

The bond changes come as airBaltic works toward a wider recapitalization. According to the airline, it is seeking roughly €225 million in interim financing along with €100 million in new equity. Earlier this month, management outlined a reorganization plan that would scale back operations at its Riga hub and shrink both its passenger fleet and its wet-leasing business.

The measures are described as an initial step rather than a full resolution of the carrier's financial situation. Further decisions on interim financing are still to come.