airBaltic (BT, Riga) has submitted a solution to Latvia’s Ministry of Transport to recover the EUR250 million euros (USD299 million) the state has invested in the company’s equity, chief executive Martin Gauss has told the news agency LETA. The proposal envisages an Initial Public Offering (IPO) on the Nasdaq Riga stock exchange and possibly a dual listing.

“We have submitted information on how we propose to do this to the ministry, and the ministry will then submit this to the Cabinet of Ministers. As we already know, we’ve offered to start listing airBaltic’s shares. However, the earliest this could take place would be the end of 2022 or the beginning of 2023,” he said in the November 27 interview.

The overall aim of the IPO would be for the state to recover at least the amount that it invested, but the airline may encourage the government to seek to raise EUR500 million (USD597 million) in the offering, Gauss said.

“It would be premature to give specific figures because we have not even attracted banks to the IPO. But our goal is definitely to organise the biggest IPO in the Baltics because airBaltic’s story is global on the one hand and very local on the other. The process is almost always more important than dry figures,” he explained.

The European Commission has already been informed about the plan, but first, the government “must now look at our proposal and figure out if it will accept it.” As previously reported, Brussels approved the state aid on July 3. The state must recoup the investment within five years, with a possible extension to seven years.

An alternative solution is to find a single buyer who would be willing to acquire airBaltic shares from the state equivalent to the same sum, but this is a very unlikely scenario, for the time being, Gauss speculated.

Following the measure, the Latvian state now owns a 96.14% stake in airBaltic, leaving 3.86% in the hands of Danish entrepreneur Lars Thuesen’s Latvian vehicle Aircraft Leasing 1.

airBaltic shares should be listed on the Nasdaq Riga exchange to facilitate Latvian residents’ access to them. Still, given the size of the IPO the shares are also likely to be listed on a larger securities market, Gauss said, predicting: “I think there will be a lot of interest in airBaltic’s shares because we will emerge from this crisis quite strong and look good against many other airlines.”

airBaltic’s most recent traffic figures show that the airline carried 64,600 passengers from its bases in Riga, Vilnius, and Tallinn Lennart Meri in October, which was 86% fewer year-on-year.

Separately, Gauss revealed to LETA on November 30 that airBaltic had registered a legal entity in neighbouring Lithuania that would enable it to conduct direct flights to Kyiv Boryspil, a fact the company confirmed to ch-aviation on the same day.

This is a technical decision, the CEO told the news agency, as the carrier wants to operate to Kyiv but flights to this destination from Latvia are currently banned due to the Baltic country’s tight coronavirus travel restrictions. He added: “There are no other reasons for this decision.”

According to the ch-aviation capacities module, airBaltic currently operates 21 routes from Riga, seven from Tallinn, and six from Vilnius.