Malev finally becomes 97% state owned following purchase of bank stakes

Published: 8/26/1999

Hungary's national airline, Malev, has become 97% state-owned, following the countersigning, by the Finance Minister, of a clause in the sales agreement, in which OTP Bank and the Hungarian Foreign Trading Bank (MKB) sold 35% of Malev to the state privatisation agency, APV. The ministry would not disclose the content of the clause, for commercial reasons, and would confirm only that it serves as a guarantee for the banks that APV will perform its contractual obligations. Air Invest Kft, a joint venture of OTP Bank and MKB, bought the Malev stake from the Italian airline, Alitalia, for an estimated $65m in 1997. According to earlier press reports, the two banks acquired an option to sell the Malev stake to APV, at a price hat reportedly included an interest of 50 basis points over LIBOR. The deal that has now been concluded may have been delayed for months because the option left a number of opportunities open for the parties concerned.

Article ID: 801