S7 Still Pursuing Stake in Austrian Airlines

ReutersAn Austrian Airlines counter at Vienna airport. S7 denied that it had already made a binding takeover offer.
VIENNA -- S7 said Wednesday that it was still interested in making an investment in Austrian Airlines, though it has not made a binding takeover offer.

S7 sent two letters to Austria's OIAG state assets agency last week, the airline's lawyers said. While the carrier said it was interested in further talks, the letters do not qualify as binding offers, the lawyers said.

The airline responded to a request by Austria's Takeover Commission to state S7's intentions, it said. Peter Michaelis, OIAG's chairman, said Oct. 27 that the agency was still in talks with S7 after it made an offer.

Austria's government on Wednesday formally extended until the end of the year OIAG's mandate to sell the government's 42 percent stake in the airline. It also agreed to assume as much as 500 million euros ($641 million) of the airline's debt after the sale negotiations are completed.

The Takover Commission said last week that Deutsche Lufthansa made a bid for Austrian Airlines on Oct. 21.

OIAG said Wednesday that it had received two offers for Austrian Air. While Lufthansa's offer formally complied with prescribed criteria, S7's was currently being evaluated on whether it met economic, legal and formal prerequisites.

Lufthansa is only willing to pay a symbolic amount for the government's 42 percent stake, Der Standard reported, while Wirtschaftsblatt newspaper reported that S7 may pay 300 million euros. Both carriers are demanding that the government take on 500 million euros of the airline's debt.