Bank supports capital increase for Cargolux
(CS) Luxembourg state bank BCEE will support a capital increase of 175 million euros for freight airline Cargolux, provided that all shareholders, including HNCA, back the move.
The capital increase is “within the proportion of the shares held by the bank,” the BCEE said in a statement, saying that it stays “faithful to its role as a responsible bank at the service of the Luxembourg economy” with this decision.
LuxairGroup had already voiced its support for the capital increase, under the condition that the state buys 8.41 percent of the group's Cargolux shares.
The capital increase is one further step in a new shareholder agreement with Chinese investor group HNCA, which had requested the capital increase, arguing that the company was under-financed to achieve its goals to expand further into the Chinese market.
However, HNCA had also said that all partners would have to take part in the cash boost.
On Friday the Cargolux board will discuss the next steps, ahead of a meeting with Infrastructure Minister François Bausch, who will report back to the Chamber of Deputies.
The final contract will then be drafted together with Finance Minister Pierre Gramegna, and will be presented to the Chinese government by HNCA.
The finalisation of the agreement could take up to three months.