Icelandair Group has announced that its Loftleidir Icelandic (Reykjavik Keflavik) subsidiary has submitted a binding offer for a 51% stake in Cabo Verde Airlines (VR, Praia).

A filing to Reykjavik stock exchange on Friday, November 24, said that the acquisition was being made through a new company, Loftleidir Cabo Verde, in which Loftleidir Icelandic holds 70% and other investors 30%. Although the offer price is confidential, the acquisition would be partly paid for by work already done by Loftleidir Icelandic for the Cabo Verde-based carrier.

It is recalled that Loftleidir Icelandic signed a management agreement with the Cape Verde Government over the restructuring of Cabo Verde Airlines, formerly TACV - Cabo Verde Airlines (VR, Praia), in August last year. Aside from revamping Cabo Verde Airlines' balance sheet and operations, the drive was also aimed at finding a strategic investor to acquire a controlling 51% stake in the airline. The 49% will be split between institutional investors (companies and financial institutions), public or private, who will be offered up to 39%, with the remaining 10% to go to airline employees.

“The participation in the acquisition of a majority share in Cabo Verde Airlines holds great opportunities for Loftleidir Icelandic, especially in light of the expected growth in passenger demand in Africa in the coming years," Árni Hermannsson, Managing Director of Loftleidir Icelandic, said.

"We have already participated in the restructuring of the company, and Cabo Verde Airlines’ operations are well suited to Loftleidir Icelandic’s projects around the world. The knowledge and experience already available within Loftleidir Icelandic and its sister companies has come to good use in restructuring the company and will continue to assist in further developments."

Cabo Verde Airlines' fleet currently consists of one B757-200 and one B767-200(ER) wet-leased from Jordan Aviation (R5, Amman Queen Alia). Future plans call for the acquisition of a further five aircraft. It currently connects the Cabo Verde Islands with points in Portugal, the United States, Brazil, Italy, and Senegal.

"Further opportunities are related to shared use of airplanes from Icelandair Group's fleet, and crews where applicable, as is already being done in various projects," Hermannsson added. "In developing connecting routes, we can also draw further on Icelandair's experience. In the case of Cabo Verde Airlines, we have opportunities for well-organized connecting routes between Europe and South America on one hand, and West Africa and North America on the other, along with West Africa and Europe. The island’s location is ideal for developing connecting flights.”

The move comes just two weeks after the Icelandic carrier's bid to acquire a 49% stake in another Atlantic archipelago-based carrier, Azores Airlines (S4, Ponta Delgada), was called off after sensitive proposal documents were leaked into the public domain.