March 6 (SeeNews) - Croatia's transport ministry said it is putting on hold the process of selecting a strategic partner for the planned recapitalisation of flag carrier Croatia Airlines [ZSE:CRAL] due to the unfavourable impact of the coronavirus outbreak on the aviation industry.
The committee in charge of selecting a strategic partner has decided to freeze the process of recapitalisation, considering the unfavourable situation and the risks currently present in the sector, the transport ministry said in a statement on Thursday.
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"The committee will continue to continuously monitor the development of the situation in the aviation sector," the ministry added.
In December, Croatia Airlines said it received two non-binding offers for its planned capital hike but did not name the candidates. Local media reported back then that the two interested investors were Greece's Aegean Airlines and Spain's Air Nostrum, with Aegean consequently confirming it had submited a non-binding bid for Croatia Airlines.
In April 2019, Croatia's government picked a consortium of Privredna Banka Zagreb (PBZ) and DVB Bank SE (part of Germany-based DZ BANK Group) to provide consultancy services for the planned recapitalisation of the flag carrier, as well as to help the company identify possible strategic partners.
Transport minister Oleg Butkovic has said that the recapitalisation process should be launched by June 1, 2020 at the latest.
In order to help Croatia Airlines stabilise its operations ahead of the planned recapitalisation, the government decided in September to provide the airline with 250 million kuna ($38 million/33 million euro) of fresh capital that will be used to finance aircraft repair, repay overdue debt to domestic suppliers, settle credit liabilities and make necessary investments in the coming 12 months.
The Croatian government controls a stake of almost 99% in the company.
(1 euro = 7.49059 kuna)