Cargolux recapitalises to cover losses

THE need to meet the requirements of bank finance agreements following substantial losses in the fiscal year 2008-9, was behind a major recapitalisation of the carrier announced on 30 November, according to its chief executive officer, Ulrich Ogiermann (right).The deal saw existing shareholders – including Luxembourg carrier and handler Luxair – purchase the 33.7 per cent stake held by SAirlines (the remains of the defunct Swissair Group) and also inject a further US$100 million of capital. Though the transaction increased Luxair’s share of Cargolux from 34.9 per cent to 52.1 per cent, it is not expected to lead to any change in the carrier’s strategic direction.Instead, Ogiermann describes the deal as a “Luxembourg solution” to the need for the carrier to keep its capital ratios within the limits demanded by its financiers.Finding a buyer for the SAirlines stake has been a goal of Cargolux ever since Swissair went into liquidation in 2001, but it was held up until 2008 by various lawsuits against SAirlines. Once these were resolved, the way was open for Cargolux to raise more capital, but to do this a buyer had to be found for the SAirlines stake, as a company in liquidation cannot make new investments. Ogiermann says it was not until later this year that financial market conditions had recovered enough to enable this to happen.For the full story read the latest issue of Air Cargo News, dated 29 January. To subscribe, click on ‘Subscribe’ above.