Cargolux receives $100m capital injection

Cargolux’s shareholders have agreed to inject US$200m in the company, with the first $100m to take place before the end of this year.

The Luxembourg-based airline said the recapitalisation became necessary due to losses incurred this year, which are expected to be more than $100m.

The move is part of a two-stage restructuring, with shareholder SAirlines selling its 33.7% stake in the company to current shareholders Luxair, BCEE and SNCI, and the Luxembourg state.

The timing of the SAirlines shares buy-out was driven by the fact that SAirlines, a company in liquidation, cannot participate in the recapitalisation, although it had been planned for some time.

Marc Hoffmann, chairman of the Cargolux board, said: “The shareholders’ preparedness to support the company is a strong signal to the other stakeholders of the company and an act of faith in the long term future of the company."

He said the intention of the shareholders is to replace those shares with a strategic, long-term holder.

“Discussions with interested parties have already commenced,” he added.

President and CEO Ulrich Ogiermann said the recapitalisation of the company would enable Cargolux to modernize its fleet with more efficient and less polluting technology starting in 2010.

“This is a crucial contributor to our turn-around plan,” he said.