09/02/12, 20:30:47 EST

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Hungary Sells State-airline Malev To Russian-backed Consortium

playfuls.com

Russian-backed consortium AirBridge on Friday signed a contract to buy Hungary's state airline Malev for 200 million forints (1.04 million dollars) plus a huge capital injection and a commitment to pay off the airline's debts, Hungary's state privatisation agency said.

AirBridge, which is owned by Boris Abramovich, has agreed to pay a modest sum for the company, but will have to shoulder other major costs. Abramovich also owns KrasAir, Russia's fourth-largest airline. AirBridge has committed to injecting 50 million euros (65.84 million dollars) into the debt-ridden airline, with 20 million of this to come in the first instalment, the agency said. The consortium has promised to either pay back or refinance loans worth a combined 13 billion forints by the end of 2007, when a state guarantee on the loans expires. The contract also specificies that AirBridge must provide a 32- million-euro bank guarantee for another 20-billion-forint loan underwritten by the government. The agency said that the final payment and first capital injection were expected to be transferred by the end of March. The deal marks the end of a long-running saga,as Hungary has put the troubled airline, which has failed to run at a profit for many years, on sale seven times in total. AirBridge beat off competition from several competitors, including Lithuania's LAL, to seal the deal.

 Printable Version  | published Feb 26, 2007