OIAG to Continue Talks With Lufthansa and S7 Airlines

Austrian state-owned holding company OIAG has said that it will continue talks with German flag carrier Deutsche Lufthansa and Russian airline operator S7 Airlines until the end of the year. The talks concern a sale of Austrian airline operator Austrian Airlines (AUA). Peter Michaelis, the chairman of OIAG, which owns a 42.75 per cent stake in AUA, has said that an offer was supposed to be accepted yesterday.

It is reported that Lufthansa offered a symbolic price of 1 euro for OIAG's stake in AUA. Some members of OIAG's privatisation committee had been against a takeover by the German airline. S7 Airlines surprisingly made a firm offer for AUA after Lufthansa and Franco-Dutch airline Air France-KLM had offered bids. Air France-KLM has withdrawn its offer. Lufthansa has stipulated in its offer that the Austrian government must accept responsibility for a large part of AUA's debt, which amounts to around 900m euros. The Austrian state has said that it is prepared to take on 500m euros' worth of the debt.

Original article by Christian Holler and Reinhard Honighaus

Abstracted from Financial Times Deutschland