airBaltic files for Chapter 11 protection in New York
The Latvian carrier has sought US bankruptcy protection to restructure its liabilities, securing a 350 million euro financing commitment while keeping its flight schedule unchanged.
airBaltic has filed for protection under Chapter 11 of the US Bankruptcy Code in New York, seeking to restructure its liabilities and keep operating through a sector crisis the airline attributes to the war between the United States and Iran.
The carrier said it has secured a financing commitment of 350 million euros, about 405 million dollars, from a group of lenders comprising Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management. Chief Executive Erno Hilden said at a press conference that the financing carries a rate of close to 12 percent and remains subject to court approval.
Hilden said the airline will negotiate with all parties involved in the coming months on sustainable terms, targeting an improvement in operating profit of 44 million euros a year.
The company, majority-owned by the Latvian government with a minority 10 percent stake held by Lufthansa, said its flight schedule will continue as normal during the supervised process, which it expects to conclude by June next year.
In its court filing, the airBaltic board cited acute financial strain from economic and geopolitical factors, stating that the conflict between the United States and Iran caused aviation fuel prices to double.
Sources
- aviacionaldia.comairBaltic se acoge al Capítulo 11 de la Ley de Bancarrota en EE.UU. ante el impacto financiero por el conflicto en Oriente Medio