Citing unsatisfactory offers, Estonia's climate minister, Kristen Michal, has proposed the government suspend the sale of Nordic Aviation Group (NAG), the parent of state-owned Nordica (ND, Tallinn Lennart Meri).
He told Estonia's Cabinet on April 11 that negotiations with two companies submitting binding purchase offers had been put on hold because their bids fell short financially and included unsuitable additional terms. Moreover, one of the bidders failed to furnish adequate information regarding the source of the funding for the transaction.
Still, according to a statement released by the Ministry of Climate, the government will work with the privatisation advisor to obtain the best possible market price for NAG.
"Nordic Aviation Group will continue to operate. In order to break even, costs will be reduced; existing contracts will be negotiated to improve their profitability. The goal is stable management of the company, solving problems, and reaching privatisation," explained Sander Salmu, deputy chancellor for mobility at the Ministry of Climate.
"It is still possible that NAG will not be able to manage on its own due to previous bad management, but the cutback and additional income plans made by the company's management will allow us to continue operations and prepare a new sale of the company either independently or together with TVH, or the sale of TVH independently," he added, referring to state-owned Transporti Varahaldus, which leases aircraft to NAG and which will also be privatised.
The Ministry of Climate and the Finance Ministry will review NAG's terms-of-sale in the next six months and evaluate the possibilities and need for restructuring. This approach aims to maintain NAG's operations, safeguard TVH's market value, sustain 314 jobs, and protect the company's EUR1 million monthly tax contribution.
According to the ch-aviation fleets module, Nordica currently operates with a sole A320-200 leased from Avolon.
In addition to Nordica, the Nordic Aviation Group also owns Xfly (Estonia) (EE, Tallinn Lennart Meri), a specialised ACMI provider, which is also for sale.
