Hungary’s government will raise the equity of loss-making airline Malev by HUF18.5 billion forints (USD$97.5 million), national news agency MTI reported on Tuesday, citing national asset management company MNV, Malev’s main owner.
MNV will count HUF10 billion forints worth of loans it gave to Malev toward the capital increase, and will transfer another HUF8.5 billion to complete the increase.
The move was necessary even after a recent HUF4.5 billion forint capital increase because the company still had HUF22.5 billion negative equity, MNV has said, adding that the increase would have to happen by August 25.
Hungary’s attempts at privatising loss-making Malev have failed and last year the government bought back all but a 5 percent stake from a group of investors, including Russia’s Vneshekonombank.
In December 2010 European Union competition regulators opened an in-depth investigation into Malev saying it may have received illegal state aid.