February 27, 2010 / 12:37 AM / 9 years ago

Hungary govt to take 95 pct stake in airline Malev

BUDAPEST, Feb 27 (Reuters) - Hungary will almost fully renationalise air carrier Malev [MALV.UL] under a deal signed by the government and Malev’s Hungarian and Russian shareholders in a bid to save the airline, the government said on Saturday.

Under the agreement, reached after lengthy negotiations, the Hungarian government will raise Malev’s capital by 25.2 billion Hungarian forints ($127.8 million) by injecting cash into the company and converting its debts into equity.

This will result in the state holding a 95 percent stake in the airline, while the Russian shareholder AirBridge will have a 5 percent stake, the finance ministry said in a statement.

“The Hungarian state taking a majority stake (in Malev) will create the possibility for the company to operate in a financially stable way,” the ministry said.

Reporting by Krisztina Than; Editing by David Gregorio

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