Jaber says no Austrian Airlines bank guarantee
Vienna, May 21, 2008
Investor Sheikh Mohamed Bin Issa al Jaber will not meet a Wednesday deadline to provide a bank guarantee for his plan to invest 150 million euros ($234.8 million) in Austrian Airlines, a spokeswoman for the sheikh said.
"Al Jaber withdrew his obligation to take part in the capital increase on April 30 so he sees no need to provide the bank guarantee," the spokeswoman said.
In a deal announced in March, the Saudi-Austrian investor was to take a 20 per cent stake in Austrian Airlines via a capital increase at 7.10 euros for about 150 million euros ($232 million).
The airline posted a first-quarter loss of earnings before interest and tax (EBIT) of 50.1 million euros in April, much worse than expected, sending the shares sliding.
Jaber pulled out because, he said, he had been deliberately misled about the airline's results and the airline last week said it had already put the issue in the hands of its lawyers.
The airline denies it misled him and extended the deadline for the bank guarantee to Wednesday to give him another chance.
The airline's chief executive, Alfred Oetsch, says the burden of high fuel prices means the sale of a majority stake to another airline is possible and has mentioned Lufthansa but the government wants the airline to remain Austrian.
Austrian Airlines shares were up 0.8 per cent at 4.02 euros at 1101 GMT on Wednesday.-Reuters