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State to continue talks with Malév owners after EGM ends without decision on capital raise

Talks will continue with the owners of Malév, and the Hungarian state will do its best to keep the national carrier from becoming insolvent, Finance Minister Péter Oszkó told Hungarian state radio station MR1 Wednesday morning.

A Malév spokesman said late Tuesday that an extraordinary shareholders meeting on Tuesday failed to make a decision on the troubled airline's capital position, but the issue would be discussed further at another general meeting on February 26.

Oszkó said on Wednesday that the state of Hungary proposed converting all of Malév's debt to the state into equity. The move would make Malév's net assets, which are currently negative, positive, he added.

The state has recommended that Malév's other owners to convert some of their receivables into equity too, but the government no more considered it a condition for its own debt-equity swap by the Tuesday shareholders' meeting, Oszkó said.

Russian state-owned bank Vnesheconombank (VEB) holds a 49% stake in Malev's parent company AirBridge. VEB acquired the stake after AirBridge owner, Russian airline tycoon Boris Abramovich, defaulted on a loan from the bank. The other 51% of AirBridge is owned by a private Hungarian individual.

Oszkó said he had instructed the National Asset Management Company (MNV) not to call down a €32 million guarantee in Malév's privatization contract until the EGM on Tuesday, but he declined to say whether the guarantee would now be called down or not, saying that talks are still going on. He would not exclude calling down the guarantee as a way to temporarily fund Malév's operations. (MTI-Econews)