Abu Dhabi's Etihad seeking banks to potentially sell Air Berlin stake - report
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Abu Dhabi’s Etihad seeking banks to potentially sell Air Berlin stake – report

Abu Dhabi’s Etihad seeking banks to potentially sell Air Berlin stake – report

Etihad acquired a 29.2 per cent in Air Berlin in 2011

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Abu Dhabi’s Etihad Airways is close to hiring banks as it mulls potentially selling its stake in Air Berlin, Bloomberg reported, citing unnamed sources.

The plan is reportedly part of the airline’s broader review into its equity holdings in struggling airlines, the sources told Bloomberg.

So far, no final decisions have been made and Etihad may decide to retain its holding, they said.

Etihad acquired a 29.2 per cent in Air Berlin in 2011, and has since invested heavily in the struggling German airline.

Earlier this month, James Hogan, president and CEO of Etihad Aviation Group and vice chairman of Air Berlin said that he was bullish about the German airline.

“We are starting to see the structural changes in the Air Berlin business that are required to create a sustainable future for Air Berlin,” he said.

“The financial results show that substantial work remains to be done, but I believe that the strategy unveiled in September 2016 is the right one, and in Thomas Winkelmann we have the right leader to accelerate the necessary changes.”

The German carrier said in September that it would shed 1,200 jobs and provide Lufthansa Group with 38 A320s under a six-year wet lease agreement as part of wide-ranging restructuring plans.

Read more: Etihad-backed Airberlin to shed 1,200 jobs

Etihad said it receives more than $150m a year in direct revenues from Air Berlin, as well as cost synergies which have reached more than $100m.

Earlier this month, Bloomberg cited a page in Air Berlin’s annual report as revealing Etihad had agreed to support the German carrier for at least another 18 months, including EUR350m ($382m) of new funding. This would take Etihad’s total exposure to the airline to nearly EUR2bn ($2.18bn), the publication reported.

The Abu Dhabi airline has been grappling with its investments in airlines such as troubled Alitalia, in which it took a 49 per cent stake in 2014. Etihad promised to turn around the loss-making airline with a $1.92bn investment that included other shareholders.

However, last month, Alitalia workers rejected its latest rescue plan, which called for cuts in jobs and salaries, making it impossible for the Italian airline to secure funds to keep its aircraft flying. The airline is preparing for special administration proceedings.

Also read: Etihad says will no longer invest in Italy’s Alitalia

Etihad-backed Air Serbia stops flights to Abu Dhabi in latest equity partner restructuring


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