Latvia’s airBaltic is seeking short-term financing from bondholders, as the state-backed airline raises its finances to avert risks. It is seeking out short term financing as financial pressure rises.
AirBaltic seeks emergency funding as concerns for financial stability grows
The carrier, backed by Germany’s Lufthansa, is seeking “interim financing” (a temporary financial solution) while it is over viewing its capital structure.
The notice from airBaltic read:
“In order to ensure that the Group has a stable platform while this process is undertaken, the Issuer intends to seek interim financing to ensure it has sufficient liquidity going forward while it conducts the Review.”
The notice didn’t go into detail about how much the carrier needs to raise and airBaltic did not comment further on the issue.
AirBaltic’s financial troubles can be deduced to the high rising costs that have been due to the Iran war in late February. It was exposed that there were some structural issues at some airlines of which investors had concerns about airBaltic’s ability to meet debt obligations. The carrier, operates a fleet of 55 Airbus A220-300 aircraft and aims to double this number by 2030.
AirBaltic has yet to pay off its short term loan
The plans had been repeatedly postponed for a stock market listing due to the engine delivery delays that have grounded many of its planes. The yield on AirBaltic’s 288 million pounds 2029 bond, that rose sharply since March, showing the higher perceived risk. Latvian Prime Minister Andris Kulbergs stated that the government could not continue to support airBaltic unless the company presented a clear strategy for its future.
Kulbergs said:
“There needs to be a strategic commercial investor who also takes an active stake in the company.”
The airline has yet to repay a 22.5 million pounds short term loan from the Latvian government that is due in August. It will need to make up for a free cash outflow of 134 million pounds in 2026 to be able to continue as planned.
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