Swiss International Air Lines has appealed to its shareholders for more funds, as negotiations on an emergency credit line run into their eighth month with no sign of an imminent deal. Since June last year, the airline has been negotiating with banks in Switzerland and abroad for a credit line believed to be worth up to SFr500 million ($395 million). This was originally intended, the airline said, to cushion the weaker 2003-4 winter period. In August, the airline said it would need the credit line by the end of 2003, and has since announced a need for more cash.
Its appeals to shareholders for additional cash have met with a mixed response. State-owned telecoms operator Swisscom has agreed to provide support in the form of a loan, as long as other investors join in, and as long as the new loan remains "a fraction of the SFr100 million" which Swisscom initially invested in Swiss. Other investors have also agreed to join, including 6.8%shareholder AMAG, which agreed to provide SFr10 million.
But neither of the two largest private shareholders, Swiss banks Credit Suisse and UBS, have so far offered additional investment. Both are already involved in the talks for the new credit line, with UK banks Barclays and Halifax also believed to be involved. "We are already negotiating on the credit facility. It makes no sense to invest in both sides," UBS says.
In its last set of results, for the quarter to 30 September, Swiss announced it had SFr615 million in cash and equivalents, down SFr157 million over the quarter. The full-year results for 2003 will be released on 23 March.
Source: Flight International