1-Mar-2010 10:14 AM

Hungary renationalises Malev - takes 95% ownership stake

Hungarian Ministry of Finance announced the Hungarian State acquired a 95% majority share in Malev, effective 27-Feb-2010. The ownership swap was achieved through a reduction in Malev's equity and then a capital increase. The Hungarian State invested EUR93.4 million for the stake, partially through cash and partly via a non-capital contribution through the conversion of earlier debts into stock. AirBridge will retain a 5% shareholding. The Hungarian Minister of Finance, Vnesheconombank, AirBridge and the Hungarian State Holding Company (MNV Zrt) signed an agreement on ownership on 26-Feb-2010. MNV Zrt initiated a call on the EUR32 million bank guarantee undertaken by Vnesheconombank. Vnesheconombank will swap Malev's loans, undertaken under "relatively unfavourable conditions" for more favourable, lower rate loans.

Vnesheconombank had held 49% ownership in Malev, and remains the largest creditor of the airline. Hungary intends to continue an intensive restructuring programme for the carrier. The financial rescue of the company is intended to "consume minimal taxpayers’ funds". Hungary also aims to stay within EU regulations for state support. A break even target has been set for 2012 at the latest. Restructuring of the network, further layoffs, renegotiation of agreements with trade unions and renegotiation of supplier contracts will continue. Martin Gauss will maintain his position as CEO. [more]

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