Aegean Airlines has signalled that its shareholders favour buying back warrants relating to pandemic compensation, rather than allow the Greek government to exercise its right to take a diluting share in the carrier.

The Greek government provided €120 million ($132 million) to compensate the company for losses caused by the pandemic, one of the conditions for which obliged the carrier to grant warrants for the right to take a share in the company.

Aegean received notice from the government in early November that it intended to exercise this right, which would give the government a 10.3% share in the airline – diluting the stakes of other shareholders.

But the airline has the choice to exercise its own right to buy back the warrants by paying their value. This would require Aegean to pay €85.4 million.

Aegean A321neo-c-Aegean Airlines

Source: Aegean Airlines

Aegean was granted Greek government support during the pandemic

Chairman Eftichios Vassilakis says the carrier has “both the liquidity and the capital” to afford the buyback.

Aegean has called a shareholder meeting for 14 December during which a decision will be taken.

Speaking during a company briefing on 24 November, Vassilakis stated that shareholders representing over 60% of the company favour the buyback which would “retire the right” of the Greek government to dilute the shareholder base.

He describes the issue as an “overhang” for the airline which it is “eager” to conclude.

Vassilakis says he will formally propose to the board and shareholders that the company proceeds with the €85.4 million buyback, adding that it will end the “painful” cycle of the pandemic from which the carrier is emerging “stronger in all aspects”.