Etihad takes 29% stake in Air Berlin
Berlin: Germany's second-largest airline Air Berlin said on Monday that United Arab Emirates carrier Etihad Airways had become its largest shareholder with a 29.21 percent stake.
A statement said Etihad, which already held a 2.99 percent stake in the cash-strapped Air Berlin, would extend USD 255 million (195 million euros) in credit lines over the next five years.
"Etihad Airways' minority stake will consist of 27.03 percent from a new share issue by Air Berlin, funded from operational cash flow, and an existing interest of 2.99 percent (pre-dilution), which will amount to a total interest of 29.21 per cent," the statement said.
The new shares will be issued at 2.31 euros and the acquisition will cost around 53 million euros, according to a calculation.
Air Berlin is trying to trim losses after growing rapidly over the last few years and piling up debt as it ordered dozens of planes.
The move will enable the carriers to have a combined network of 239 destinations, the statement said.
"Etihad Airways and the Air Berlin group carry a combined total of more than 40 million passengers a year, operate 233 aircraft, and employ 18,000 people. Together, the companies generate more than USD 9 billion in revenues," the statement said.
"We estimate each airline could achieve incremental revenues of between 35 million euros and 40 million euros just in the first year, and we believe the partnership has enormous potential to unlock a range of efficiencies."