On Thursday, 20 August, the Saeima convened for an extraordinary session sitting and passed in the final reading the urgent Law on Financial Stabilisation Measures for Air Baltic Corporation AS, which establishes a special framework for the state’s participation in the airline’s financial stabilisation process.

For Latvia, airBaltic is a strategically important company in which substantial public funds have been invested. The Law provides for a mechanism enabling the state to protect its interests in a prompt and coordinated manner during the company’s financial stabilisation process, while ensuring parliamentary oversight of the decisions taken, emphasised Aiva Vīksna, Chair of the Budget and Finance (Taxation) Committee, which is responsible for the Draft Law.

The Law aims to enable the state, as a shareholder, creditor, and bondholder of airBaltic, to take timely decisions during the company’s financial stabilisation process and have an equal say with other investors and creditors, thereby safeguarding the state’s financial interests without delay.

The Law permits the repayment term of the state loan granted to the company to be extended, claims arising from the state loan and state-owned bonds to be capitalised, and, where necessary, the state to participate in providing bridge financing to the company. To this end, the Law provides for the possibility of the state purchasing newly issued company bonds in an amount of up to EUR 30 million, while a limit of up to EUR 50 million has been set for the conversion of claims arising from state-owned bonds. Any specific decisions regarding the financial stabilisation measures are to be taken by the Cabinet of Ministers.

The new Law also establishes regular parliamentary oversight by requiring the Cabinet of Ministers to report to the Saeima Budget and Finance (Taxation) Committee on the implementation progress of the financial stabilisation measures at least once every quarter.

Saeima Press Service