Aeroflot, Air France-KLM, Korean Air looking to buy CSA

PRAGUE (Thomson Financial) - Aeroflot, Air France-KLM, Korean

Air and several Russian financial investors have been in talks with Czech airline

CSA as they are considering bidding for the state-run air carrier in its planned

privatisation, a source close to the preparations of the sale told Thomson Financial


"CSA has been talking to Aeroflot, which is part of the Sky Team alliance with CSA, and a number of Russian financial investors," one source said.

"Air France-KLM and Korean Air have also expressed interest and have been in contact with CSA over the possibility of an acquisition," the source added.

CSA board chairman Radomir Lasak denied in a statement this afternoon that the company would talk to investors about the possibilities and the way of privatising the airlines, adding that the sale is a matter of the owner, not the management of the company.

The Czech cabinet plans to sell the loss-making air carrier as soon as it at least breaks even, which is expected in 2008, and should receive proposals from the transport minister and the finance minister for the method of the sale by March.

Russian companies are particularly interested in the Czech company as an acquisition in the central European region would open their way to the West, the source said, adding that CSA's biggest asset is its dense worldwide route network.

When contacted by Thomson Financial News, Aeroflot declined to comment on possible interest in CSA. Air France-KLM denied it was looking to buy the Czech air carrier.

Sources close to the sale preparations say that CSA management is also considering floating a minority stake of the airline on the Prague stock exchange and later selling the controlling stake to strategic investors at a premium.

"This is the CSA management idea... they probably think that this way they can raise more money, but the government isn't likely to agree with such a scenario as this kind of an IPO could be likely abused by speculators," the source close to the sale said.

According to sources from the airline, CSA equity value was estimated at 5-6 bln crowns in 2005 and fell to 3 bln crowns last year.

CSA declined to comment on potential bidders for the company and said its "indicative value" has been rising due to the "curative strategy" of its current management.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More