BNS - The government here decided on Thursday to make a contribution of 38.76 million kroons (EUR about 2.5 mln) into the share capital of Estonian Air.
The government also gave powers to Minister of Economy and Communications Juhan Parts to vote at the general meeting of shareholders of Estonian Air for increasing the share capital by 114 million kroons.
The government's condition is that similar contributions proportionate to the size of shareholdings must be made also by other shareholders of Estonian Air and the company will continue efforts to improve efficiency.
The share capital will be increased through issuing 207,286 new shares with a face value of 550 kroons each. The state would subscribe for 70,473 of the shares and money for payment would be taken from the state budget.
The government said Estonian Air needs the share capital increase to carry out a reorganization plan whose main purpose is to take the company past the point of profit threshold and ensure the preservation of important direct air links from the airport of Tallinn also under conditions of declining volumes.
The Scandinavian airline group SAS owns 49 percent of Estonian Air, the Estonian government 34 percent and the Creco investment bank 17 percent.
(EUR 1 = EEK 15.65)