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Bamboo Airways has new investor

Bamboo Airways has new investor

Saturday, March 18, 2023, 15:03 GMT+7
Bamboo Airways has new investor
Passengers embark on a Bamboo Airways aircraft at Ho Chi Minh City-based Tan Son Nhat International Airport. Photo: Cong Trung/ Tuoi Tre

Bamboo Airways is negotiating a deal with a new investor, showing its latest move one year after former chairman Trinh Van Quyet was arrested in March 2022 on charges of stock market manipulation, a representative of the airline told Tuoi Tre (Youth) newspaper on Thursday.

The air carrier and the new investor are in the process of completing a part of investment procedures. Who the investor is remains unclear.

The airline has found a new investor to replace former chairman Trinh Van Quyet and some relevant shareholders, said Bamboo Airways CEO Nguyen Manh Quan.

The air carrier also actively helped the investor with relevant procedures of stake acquisition. The transferred stake was mortgaged at banks from 2020 by old shareholders.

Apart from the stake purchase, the new investor agreed to take responsibility for all payments for the previous loans taken out by the old shareholders who used their stakes in Bamboo Airways as collateral at banks.

Over the past few months, Bamboo Airways has faced financial distress due to the COVID-19 pandemic and upheavals in senior personnel. As such, the airline has cried for help from major investors to relieve the hardship.

Him Lam Corporation lent Bamboo Airways VND8 trillion (US$338 million). Him Lam is a real estate firm run by Duong Cong Minh, who is a senior advisor to Bamboo Airways.

The airline’s recent moves are considered a solution to its restructuring and operation stabilization.

Speaking at its annual general shareholder meeting in early March, Le Ba Nguyen, chairman of FLC Group, said that the firm was considering selling its stake in Bamboo Airways.

FLC Group’s total investment in the air carrier stands at VND4.015 trillion ($170 million), or a 21.7-percent stake.

In 2021, Bamboo Airways missed earnings, so FLC made a provision for its investment of over VND373 billion ($15.7 million). The provision jumped to VND3.64 trillion ($154 million) in 2022.

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

Bamboo Airways has sought for a new investor for more than one year, as aviation is a highly competitive industry and is regarded as a ‘cash-burning industry’ in airspace.

The airline has a fleet of 30 planes. For its strong growth, the carrier is set to expand its fleet to 100 aircraft.

Other local airlines, Pacific Airlines and Vietravel Airlines, are also looking for investors to make their financial health better to overcome market challenges.

FLC Group set up Bamboo Airways in late May 2017, with its initial charter capital of VND700 billion ($29.6 million).

In April 2022, FLC became the airline’s largest shareholder, with capital contribution totaling over VND3.58 trillion ($151.4 million), or a 51.24-percent stake in the air carrier.

FLC former chairman Quyet poured over VND2.8 trillion ($118.4 million) into the airline, or a 40.03-percent stake, while other shareholders injected more than VND610 billion ($25.8 million), an 8.73-percent share.

In its recent financial statement, FLC’s ownership in Bamboo Airways fell to 21.7 percent of the latter’s total charter capital of VND18.5 trillion ($782.3 million).

Bamboo Airways’ board of directors has five members, including Nguyen Ngoc Trong, chairman of the airline; Doan Huu Doan and Le Ba Nguyen, vice-chairs of the carrier; Le Thai Sam; and Nguyen Manh Quan.

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Tieu Bac - Cong Trung / Tuoi Tre News

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