Croatia Airlines to shore up liquidity with Kn350m government injection

Croatia Airlines is to hold an extraordinary general assembly to approve a recapitalisation scheme which involves raising Kn350m ($54.7m) through a share issue. Under the proposal, to be discussed at the 14 December assembly, the share capital of the airline would increase from Kn277.8m to Kn627.8m. Croatia Airlines would issue 35m new shares, with a nominal value of Kn10. “The purpose of the share capital increase is to return the company’s capital and reserves to pre-crisis levels,” says the carrier. It says the increase in share capital shall be carried out through an investment agreement concluded between the airline and the Croatian state. Shareholders other than the government will be excluded from participating in the offer. Croatia’s transport ministry, on 13 November, put forward a proposal to inject Kn88.5m into the company to compensate for damage inflicted by the pandemic from 11 March to 30 June. The ministry’s proposal says the payment of these funds must be made by 31 December at the latest. Croatia Airlines, it states, is “no exception” to the “devastating” effects on the aviation industry arising from the pandemic.<br/>