Cimber Sterling agrees takeover by Ukrainian investor

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Ukrainian entrepreneur Igor Kolomoysky is to take control of Denmark's Cimber Sterling following an agreement with his investment firm Manswell, which will hold up to 70% of the carrier's shares.

Manswell will take control through a subscription for up to 110.5 million new Cimber Sterling shares, a capital increase adopted during an extraordinary general meeting on 29 July.

Kolomoysky has interests in Ukrainian air carriers including Dniproavia and AeroSvit.

Cimber Sterling chairman Vilhelm Hahn-Petersen told shareholders that the carrier had held discussions with a number of different potential industrial investors to reinforce the company's deteriorating financial position - a situation which was threatening the survival of the carrier.

Manswell had indicated that it wanted to maintain the carrier as a listed company, he said, and use Cimber Sterling as platform for establishing a larger Nordic airline in collaboration with Skyways and City Airline, which it had already acquired.

But Hahn-Petersen added: "According to our information Manswell has not yet decided whether the three airlines will be merged, but the advantages and disadvantages thereof will be evaluated during the next few months."

Manswell has interests in the leasing sector in Portugal, he said, and this could provide an opportunity for "future streamlining" of the fleet. Hahn-Petersen admitted that the carrier has not been able to achieve the volumes required to operate three different aircraft types profitably in three different market sectors.

The Cypriot-based investment firm will inject DKr167 million ($32 million) into Cimber Sterling by acquiring the shares at DKr1.50 each.

"Overall the board of directors considers Manswell an attractive business partner for Cimber Sterling both from a financial and industrial point of view," said Hahn-Petersen.

"We do not want to hide, in any way, that Cimber Sterling needs this contribution of capital," said Hahn-Petersen, adding that the airline was "squeezed for cash" and was battling a "lack of creditworthiness" that was creating "very adverse terms of payments" from suppliers.

"It would be very difficult for Cimber Sterling to survive as an independent airline without a strategic partner and, as the situation has developed, it is difficult for us to see an alternative to the agreement with Manswell," he said.