Struggling Cimber receives another cash injection

Moscow
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Danish carrier Cimber Sterling has secured a further cash injection from its major shareholder to improve its capital base and sustain operations.

Chairman Grigory Gurtovoy says Cyprus-based Mansvell Enterprises last month extended DKr150 million ($27 million) to the airline in several tranches.

At an extraordinary general meeting on 24 April, Gurtovoy said Cimber had already obtained the first tranche of DKr50 million.

He said that the company had "lost more than half of its share capital", and had been required to call a general meeting to update its financial position.

Mansvell took over Cimber Sterling last year but Gurtovoy admits that its capital injection was not sufficient to absorb mounting losses forecast to reach DKr 160-200 million for the year ending 30 April.

"While the combination of improved revenues, reduced costs and the loans extended by Mansvell has improved Cimber Sterling liquidity the effect is not immediately sufficient to recover the equity position," he adds.

Cimber's board has proposed that the shareholders grant permission to raise the share capital by up to DKr300 million through conversion of debt.