The Latvian national airline airBaltic will spend more than half of the first available portion of funding raised under Chapter 11 on the buyback of aircraft and engines. €78.925 million is allocated for these purposes, according to a temporary court ruling in bankruptcy cases in the Southern District of New York.
Of the first €140 million that the company expects to receive in the coming days, €78.925 million will be used to fully repay obligations to Export Development Canada and Axiom Baltic Services. The principal debt amounts to €71.666 million, to which accrued interest, fees, and other unpaid amounts are added.
The obligations are secured by airBaltic's aircraft, spare engines, and a flight simulator. After the debt is repaid, these assets are planned to be used as collateral for new loans provided as part of the financial restructuring process.
As collateral for the new funding, it is proposed to transfer eight Airbus A220-300 aircraft, seven Pratt & Whitney spare engines, an Airbus A220 flight simulator, spare parts inventories, trademarks and intellectual property, hangars, real estate, training infrastructure, accounts receivable, and other company assets.
Representatives of airBaltic did not provide detailed comments to LETA regarding the terms of the use of funds and specific transactions. However, they emphasized that the first part of the funding is necessary for the continued operation of the airline and for conducting financial restructuring.
airBaltic's Chief Financial Officer Vitolds Yakovlev confirmed on September 16 during the program "Kas notiek Latvijā?" that more than €70 million will be directed towards the "buyback" of eight aircraft and seven engines.
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