The change of ownership of the Latvia-based airline "SmartLynx Airlines," which ceased its operations on Monday, November 24, shortly before the initiation of the legal protection process, raises many questions, said former Minister of Transport Talis Linkaits to the LETA agency.
He noted that the way "SmartLynx Airlines" came to a halt should be assessed by creditors, and if necessary, they should file claims against the previous shareholders.
"It is clear that there was an attempt to separate the bad airline from the good ones. One was to be bankrupted so that the others could continue operating," explained Linkaits.
At the same time, representatives of "SmartLynx Airlines Latvia" in a conversation with the LETA agency rejected the notion that the cessation of operations was a premeditated scheme, noting that under the management of the previous owners, more than 100 million euros had been invested in "SmartLynx" this year and last year. The new owners had specific development plans that could not be realized for various reasons.
LETA had already reported that on October 22 of this year, "SmartLynx Airlines" announced a change of ownership. The new owners are former CEO of "SmartLynx Airlines" Edvins Demenjus (5%), the company's CFO Mindaugas Kazakavičius (5%), and the Netherlands-based specialized investment fund "Stichting Break Point Distressed Assets Management" (90%), whose ultimate beneficiary is Cypriot citizen Ilyas Iraklios. Notably, the fund was registered just a month before the deal — on September 22, according to information on the website "companyinfo.nl" referencing the Dutch trade register KVK.
The sole owner of "SmartLynx Airlines" prior to this was LLC "Smart Aviation Holding," owned by the "Avia Solutions Group," whose beneficiary is Gediminas Žemalys, according to information from the resource "Firmas.lv."
A few days later, on October 28, the Riga District Court initiated a legal protection case for "SmartLynx."
According to unofficial information published on the website "blacklist.aero," the total amount of liabilities of "SmartLynx" to more than 780 creditors is 238.4 million euros, including debts to companies associated with the previous owner "Avia Solutions Group" — 174.374 million euros, and to other creditors — 64 million euros.
In particular, it is stated that the debt of "SmartLynx" to LLC "Fedex Express Latvia" is approximately 775,000 euros, to JSC "BTA Baltic Insurance Company" (BTA) — 117,000 euros, to LLC "ARS Logistika" — 86,000 euros, to LLC "Havas Latvia" — 69,000 euros, and to LLC "Airo Catering Services Latvija" — 53,000 euros.
Representatives of BTA explained to the LETA agency that "SmartLynx Airlines" acquired insurance policies for which it was required to make payment a year in advance. At the same time, BTA took measures to reduce the potential debt amount, and the actual debt is now significantly less than the stated 117,000 euros.
BTA representatives also reported that they had not yet received a plan for legal protection measures for approval, but would continue to monitor current information and the progress of the process.
The other mentioned Latvian companies, as well as representatives of "SmartLynx Airlines," did not comment on the total debt to creditors at the time of publication.
The website "blacklist.aero" points out that the collected data indicates signs of intentional bankruptcy of "SmartLynx," including the sale of the company shortly before the initiation of the creditor protection process, retention of control over management, and the division of the business, creating the impression of deliberate isolation of debts. The article concludes that the scheme resembles an asset stripping model — profitable structures remain with the previous owner, while debts are transferred to the new fund.
LETA also has a letter from Demenjus addressed to the creditors of "SmartLynx Airlines" on Monday, November 24, stating that false and misleading information about "SmartLynx Airlines" and its restructuring process has been posted on the website "blacklist.aero," authored by Artem Degtyarev.
In the letter, Demenjus claims that "SmartLynx Airlines" operates within all applicable legal norms and standards. These steps are being taken to ensure proper management of the company's affairs and to ensure equal treatment of all stakeholders.
He also points out that Degtyarev and his associated company "Air Justice," which manages the website "blacklist.aero," have spread allegations against "SmartLynx Airlines" and urged creditors to take action against the company. The letter also mentions instances where Degtyarev and his entities were allegedly linked to possible coordinated attacks on the business reputation of companies, spreading false information, and other similar actions.
LETA also has a letter from Degtyarev addressed to the creditors of "SmartLynx," claiming that the actions of "Avia Solutions Group" to settle debts indicate a carefully planned scheme aimed at avoiding full corporate restructuring and excluding oversight by the insolvency process administrator. In the letter, he urges creditors to develop a coordinated strategy and tactical actions.
LETA had already reported that the Latvia-based airline "SmartLynx Airlines" ceased its business activities on Monday, November 24. It was also confirmed that the commercial activities of "SmartLynx Airlines Estonia" and "SmartLynx Airlines Malta" were also terminated, and all three Air Operator Certificates (AOC) were suspended.
The decision was made after assessing the financial condition of the company and the prospects for long-term operations.
Demenjus indicated that this decision was made after a thorough analysis of all possible scenarios.
"Unfortunately, under the current conditions, it was concluded that the continuation of the company's operations is impossible," he added.
A representative of "SmartLynx," Agija Kola-Kanca, explained to the LETA agency that a small team is currently still working in the company to return aircraft to lessors.
She added that it is currently impossible to accurately state the number of employees who will lose their jobs, as the cessation of operations was announced on Monday, November 24. A total of about 400 people worked in various countries within "SmartLynx" — mainly aviation specialists: engineers, flight planning specialists, and support staff.
Kola-Kanca also noted that in Latvia, the "SmartLynx Airlines" fleet currently has one or two aircraft, while the others belong to "SmartLynx Airlines Malta" and "SmartLynx Airlines Estonia" and are in the process of being returned to their owners.
She explained that the "SmartLynx" office in Riga was rented, so its future depends on the decisions of the building's owners.
Last year, "SmartLynx Airlines" transported 10.66 million passengers, which is 62.5% more than in 2023. Over the year, the airline performed 68,085 flights, which is 43.4% more than the previous year when 47,495 flights were completed. The volume of cargo transported decreased by 6.8% to 31,872 tons.
By the end of 2024, the fleet of "SmartLynx Airlines" numbered 68 aircraft, one more than the previous year. However, in the spring of this year, the airline announced plans to reduce its fleet by 30%.
In 2023, the turnover of "SmartLynx Airlines" was 339.027 million euros, and the profit was 11.089 million euros, according to data from "Firmas.lv." The consolidated turnover of the "SmartLynx Airlines" group was 496.651 million euros, and the profit was 22.774 million euros. Financial results for 2024 have not yet been published.
"SmartLynx Airlines" was registered in 1992, and its authorized capital is one million euros.
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