The protracted sale process of Slovenian flag carrier Adria Airways appears to be entering its denouement, following reports that a meeting scheduled for 19th January 2016 called to discuss and vote on a recapitalisation package, rumoured to total €8 million and designed to see the ailing airline through the notoriously lean winter season, will decide Adria’s fate.

Previously slated for November, the plenary session was delayed to allow Slovenian Sovereign Holding(SSH) – the state vehicle founded to oversee the privatisation of the fifteen state-owned enterprises earmarked for disposal, some of which have been denationalised more expeditiously than others –  more time to negotiate with potential suitors and those who lodged binding bids for Adria. It would now appear that the state has a preferred purchaser in mind but until the extraordinary shareholders’ meeting has been completed, the future of the Brnik-based airline continues to remain unclear.

A possibility of the successful bid being predicated on the willingness to bankroll the estimated €8 million needed to bolster Adria’s operation through the winter period seems likely, assuming many of the airline’s debts are restructured, deferred or as may ultimately be demanded by the new owner, a complete right off of its largest liabilities. Existing shareholders will not though have an automatic right to purchase the additional equity created by the capital injection, a quid pro quo arrangement seeing shares sold for a nominal €1 each.

The urgent need for the Slovenian state to remove Adria from its books is apparent in the conditions imposed on any deal agreed in mid-January, giving the successful party a nine day period to conclude the deal. An unwillingness to bail out the airline has though largely been rendered irrelevant – any financial assistance declared to be state aid would contravene European Union competition legislation. German and Polish companies are expected to have made the final cut of interested parties, with several Warsaw-based firms recently securing former Slovenian state-owned enterprises Paloma and aircraft maintenance concern Adria Airways Tehnika.

Further reading on the latest issues affecting Adria Airways can be viewed at:

Ex Yugoslav Aviation: sale of Adria Airways imminent?