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Czech Airlines stake sale to Korean Air approved by Czech Cabinet: report

14-Mar-2013 7:55 AM

Czech Cabinet approved the sale of a 44% stake in loss-making CSA Czech Airlines to Korean Air on 13-Mar-2013, according to Prime Minister Petr Necas and as reported by Mr Necas said the move is "a very important step that makes possible the development of CSA and Prague's international airport." “The main goal of this for both parties is to work on the development of Prague airport as a hub and CSA as a carrier so obviously there will be some changes,” CSA said. The contract will reportedly be signed on 09-Apr-2013 and the share handover will likely occur in 1H2013. Korean Air was the only bidder for the state carrier and will reportedly acquire the stake for EUR2.64 million. As previously reported, Czech Finance Minister Miroslav Kalousek has expressed support for the deal, confirming the offer of EUR2.64 million (USD3.44 million) for the 44% stake. The bid was based on an earlier estimate by Ernst & Young that valued the airline at CZK148.5 million (USD7.6 million). Korean Air’s offer met all the conditions and is binding, the Ministry said and Mr Kalousek said he has recommended the proposal to cabinet stating: "I will propose that the cabinet accept this offer. I consider it to be a great opportunity to secure the future for CSA and the Vaclav Havel Airport Prague". Korean Air already operates direct service to Prague, and under the privatisation plan it would make Prague one of its transfer points in Europe. The carrier handled 4.25 million passengers in 2011 and reported a loss of CZK241 million (USD12.19 million) in 2011, the last period for which results are available. The government was willing to sell a majority stake to a European partner or a minority stake to investors elsewhere. If the government at the next meeting approve the offer, a formal agreement could be signed in mid-Apr-2013.