Air Berlin Buys LTU, Both Make Strong Partnerships

With a 140 million euros bid the low cost carrier Air Berlin acquired the German charter carrier LTU as an effort to expand its network in both the internal market of Germany and in the long-haul market. Along with the 100 percent capital stock of LTU, Air Berlin has taken over the debt of the charter carrier that reaches the 190 to 200 million euros.

For that reason Air Berlin PLC has launched a combined equity and convertible bond issue to raise aggregate proceeds of approximately 250 million euros. Proceeds of the equity issue, consisting of approximately 5.9 million shares from a capital increase and 150 million euros proceeds from the convertible bond to be issued by a subsidiary of Air Berlin, will be used to finance a part of the acquisition consideration for LTU as well as refinancing of 100 million euros of LTU’s debt and approximately 50 million euros of Air Berlin’s debt.

Furthermore, Air Berlin is entering with strong initiatives in the aviation market of Central and Northern Europe as the carrier will partner with Thomas Cook’s Condor airline adding code share services. This cooperation is estimated to halt the existing one with TUI’s TUIfly.

Air Berlin will not stop here as the low cost carrier plans to acquire the 49 percent of the capital stock of the Swiss Airline Belair.