Lufthansa Group has agreed to invest €14 million in AirBaltic for a convertible share representing a 10 per cent stake in the Latvia-based carrier, the companies announced on Wednesday.
Lufthansa will also take a seat on AirBaltic's supervisory board. The deal is expected to close during the second quarter, subject to antitrust review.
Lufthansa's convertible share will be changed into ordinary shares upon a potential IPO of AirBaltic, with the German-based company's share to be not less than 5 per cent, according to the companies.
The deal provides AirBaltic with additional funding and supports its growth plans, according to the carrier.
The transaction comes after Lufthansa and AirBaltic recently extended their wet-lease agreement for another three years beyond its initial summer 2025 end date. This will see up to 21 of AirBaltic’s Airbus A220-300 aircraft deployed to various Lufthansa Group hubs during summer, and five during the winter season.
Earlier this month, Lufthansa Group also completed a deal to acquire a 41 per cent stake in Italian carrier ITA Airways.