The state will pay Air Serbia 1.82 billion dinars, which is 15.47 million euros, which will increase its ownership share in this company to 83.58 percent, while Etihad’s share will fall to 16.42 percent. This will be implemented through the recapitalization of Air Serbia, in which the Republic of Serbia will become the owner of another 1.8 million shares of the domestic airline, paying one thousand dinars per share, it follows from the decision adopted by the Assembly of shareholders of this airline. Together with the previous recapitalization, from December 2020, the state will increase its stake in the capital of Air Serbia by a total of 115.47 million euros.
“It is hereby decided that Air Serbia will increase its share capital with new contributions, by issuing 1,818,820 ordinary shares to the shareholder – the Republic of Serbia, without publishing a prospectus”, reads the Decision on the issuance of ordinary shares of the seventh issue to increase the share capital of Air Serbia.
It is a closed issue of shares, for which publication of the prospectus is not mandatory.
Etihad, as a minority shareholder, has no pre-emptive right to purchase these shares.
Namely, as it is stated in the documents that portal N1 had access to, at the meeting of the Supervisory Board on August 29, two proposed decisions were adopted – one on the broadcasting of shares, while the other is a proposal for the Decision on the exclusion of the right of pre-emptive subscription of shares.
These proposals were adopted by the Assembly of Shareholders of Air Serbia at the session held on August 30, 2022.
“The right of pre-emptive subscription is canceled for the other shareholders, due to the established current inability of Etihad Airways to participate in the necessary recapitalization of Air Serbia,” this decision states.
The state carried out the first recapitalization of Air Serbia in December 2020 with a monetary contribution of 100 million euros.
In June of this year, the Government of Serbia makes a new conclusion, which, as stated in the documents, “accepts the Report on the assessment of the value of damage and objective loss suffered by the Air Serbia company due to the covid-19 pandemic in the period from March 19, 2020 to December 31, 2021”. Based on the findings of that report, the Government of Serbia agreed to, in addition to the recapitalization carried out in December 2020, register a new cash contribution in the amount of 15.47 million euros, which at the average exchange rate is 1,818,820,276 dinars.
Thus, the total increase of the shares of the Republic of Serbia in the share capital of Air Serbia amounts to 115,470,000 euros.
The first recapitalization
Let us remind you that in December 2020, the state paid Air Serbia one hundred million euros in aid, also through recapitalization. At that time, it was about the amount of exactly 11,757,730,000 dinars, paid for the issuance of 11,757,730 shares, worth a thousand dinars each.
Thus, at the end of 2020, the Republic of Serbia increased its ownership in this company from 51 percent to 81.97 percent, while Etihad’s share fell from 49 percent to 18.03 percent.
As Air Serbia announced at the time, the recapitalization was carried out on the basis of a contract between the Ministry of Economy and Air Serbia, at the request of the national air carrier, and in accordance with the decree from October 2020. Namely, that decree stipulates that companies that are problem due to the pandemic, they can get money from the state, but the state will get a share in their property in return.
This type of aid, through recapitalization, is intended by decree for both private and state-owned enterprises, but it was initially estimated that it was brought precisely because of Air Serbia.
The calculations of the Fiscal Council at the time showed that the state allocated around 200 million euros for Air Serbia.