UPDATE 2-Latvian parliament approves AirBaltic cash injection

Thu Dec 3, 2015 1:12pm EST
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(Adds comments by financial investor, context)

By Gederts Gelzis and Tim Hepher

RIGA/PARIS Dec 3 (Reuters) - Latvia's parliament approved an 80 million-euro ($85 million) cash injection for AirBaltic on Thursday, lifting a potential hurdle for the state-owned airline to complete the acquisition of CSeries passenger jets from Canada's Bombardier.

The green light follows a government decision to prevent the state-owned airline separately importing jets from Russia's Sukhoi, a possibility that had threatened to put the airline at odds with the Baltic state's hawkish policy against Moscow.

The state infusion is part of a refinancing plan that also involves 52 million euros of private investment from German banker Ralf-Dieter Montag-Girmes, in return for a 20 percent stake in the last surviving Baltic flag carrier.

The arrival of an investor with lengthy experience in Russia had triggered speculation that Latvia could import Russian jets, putting approval for the refinancing at risk.

Montag-Girmes, who has denied any pro-Russian bias, told Reuters on Thursday his decision to purchase a stake was "completely independent" of fleet decisions.

Officials said the possibility of purchasing Russian jets had nonetheless been taken off the table.

"AirBaltic has altered its business plans and will substitute Sukhoi Superjets (with) Bombardier planes, and all the finances will be covered," parliamentary budget committee chairman Karlis Sadurskis told Reuters.   Continued...