💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Polish carrier LOT set to pick capital hike adviser

Published 08/12/2009, 08:56 AM
Updated 08/12/2009, 09:00 AM

* 2008 net loss of 733 million zlotys, fuel bet bites

* H1 2009 loss 178 million zlotys

* Capital hike may bring new investor or IPO

By Chris Borowski

WARSAW, Aug 12 (Reuters) - Poland's loss-making airline LOT will pick an adviser as soon as next week to help sell new shares, its head said on Wednesday, in a step that may lead to Lufthansa or another rival taking a stake.

LOT, which on Tuesday reported a 733 million zlotys ($247 million) net loss for 2008 and another 178 million in the first half of this year, has not yet decided on the form of a much needed capital hike.

But options include selling a stake to another carrier or financial investor or even floating the 80-year-old airline on a stock exchange, chief executive Sebastian Mikosz said.

"We're in talks with an investment bank which will advise us on the capital hike and we hope to announce our choice next week," he told a news conference, without elaborating.

Mikosz, who became LOT's seventh chief executive in four years when he took the helm in March, said the capital hike would likely take place next year, giving him time to move forward with restructuring to stem mounting losses.

The company blamed the 2008 results on a 412 million zlotys loss on fuel hedging after the drop in oil prices, which added to already weak operating results and losses at several units, including a no-frills carrier it has since shut down.

LOT also contends with high costs and salaries defended by powerful unions, which pushed out the previous chief executive.

In June, Mikosz revoked a collective bargaining deal in place since 1993 and is in talks on a more flexible wage system.

BETTER SECOND HALF SEEN

The carrier expects at least to break even in the second half, Chief Financial Officer Andrzej Oslizlo told reporters.

LOT is upgrading its fleet and will be Europe's first carrier to introduce Boeing's long-delayed 787 Dreamliner.

Lufthansa, which has snapped up Brussels Airlines and BMI and is awaiting a European Union go-ahead for its purchase of Austrian Airlines, has indicated in the past it may be interested in LOT.

The two already cooperate as members of the Sky Alliance.

The first attempt to privatise LOT a decade ago failed after the buyer, Swiss Air, went bankrupt in 2001. Earlier this year Poland bought back the 25-percent stake it sold.

LOT executives said the airline industry's worst downturn in decades would last at least until the middle of next year.

But they dismissed concerns that investors may be reluctant to buy shares in the troubled Polish carrier after it moves forward with restructuring plans.

"Investors will be investing in our future, not our past," Oslizlo said. "But LOT's rescue will first come from LOT. Then we'll be able to think about further steps." ($1 = 2.971 zlotys) (Editing by Jon Loades-Carter)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.