March 26, 2014 / 9:11 PM / in 3 years

Germany's Air Berlin says in recapitalization talks

3 Min Read

James Hogan (L), CEO of Etihad Airways and Air Berlin's CEO Wolfgang Prock-Schauer pose in front of an aircraft following a news conference at Schoenefeld airport south of Berlin January 13, 2014.Fabrizio Bensch

FRANKFURT (Reuters) - German airline Air Berlin (AB1.DE) said it was in talks for a recapitalization to strengthen its finances, as it announced it was again postponing publication of its annual results.

"The company is continuing its discussions on those measures with certain shareholders and finance providers," Germany's second largest airline after Lufthansa (LHAG.DE) said in a statement late on Wednesday.

Air Berlin, which built up debt after expanding too rapidly, had said last week it was in advanced talks over options that would have a substantial impact, sparking speculation over a possible move by Etihad to gain bigger control over the carrier.

Abu Dhabi-based Etihad owns 29.2 percent of Air Berlin while Turkey's Sabanci family own a 12 percent stake.

The German airline had already last week pushed back to March 27 publication of its annual results, which analysts on average expect to show a 2013 operating loss of 120 million euros ($165 million).

Air Berlin said on Wednesday it would announce a new date for the results in April.

Air Berlin in November scrapped its aim of breaking even at the operating profit level in 2013 and warned it would only come close to consensus for a 40 million euro loss before interest and tax if it found additional sources of income.

Air Berlin managed to post its first profit in five years in 2012 only by selling a majority stake in its frequent flyer program to Etihad.

Adding to its woes are plans by low-cost rivals like Spain's Vueling (ICAG.L) and Britain's easyJet (EZJ.L), to expand in Germany, trying to tempt business customers in Europe's largest economy.

"The likes of easyJet, Ryanair (RYA.I) and Vueling are seeing a chance to take traffic from weaker competitors," Goodbody analyst Donal O'Neill said, referring to the airlines' plans to expand not only in Germany, but also Italy, where flag carrier Alitalia is struggling with debt of more than 800 million euros.

Shares in Air Berlin closed on Wednesday at 2.05 euros. They have gained 23 percent so far this year as investors speculate on a buy-out.

Air Berlin had net debt of 811 million euros at the end of September 2013, compared with a current market capitalization of about 240 million.

($1 = 0.7254 Euros)

Reporting by Victoria Bryan; Editing by Jonathan Gould and Robin Pomeroy

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below