The State Privatization and Holding Zrt (ÁPV) on Tuesday published its new privatization tender for Hungarian airline Malév Zrt.
The open, negotiated procedure is for 99.95% of the airline's shares. The deadline for bidding is November 3, after which negotiations will begin. Up to 10% of the purchase price may be paid with compensation coupons; the rest is to be paid in cash.
Malév had net assets of Ft 6.398 billion (€23.2 million) at the end of 2005, the announcement reveals. Bidders must commit to raising the airline's capital in one lump sum or in installments, with cash or a combination of cash and in-kind contributions.
Bidders must submit together with their offers their plans on how they intend to maintain Malév's status as a national carrier and for how long. Malév is defined as a 'national carrier' as long as more than 50% of its shares are owned by Hungarians.
Bidders must describe plans for preparing Malév to join an airline alliance. Malév applied last year to join the oneworld airline alliance and is expected to become a full member at the beginning of 2007.
Bidders must also propose how they will manage Malév's stock of state-guaranteed loans. The announcement, however, does not reveal how big this stock is.
The winning bidder will be required to sign a contract with Malév’s employees guaranteeing working conditions.
ÁPV said earlier that the main aims of the privatization would be to ensure the long-term operation of the airline and make it independent of state financing through a capital injection and changes to its structure. ÁPV said it believed a professional investor with a strong financial background could, with a capital raise and a flexible approach to fierce competition within the industry, make the best use of the airline's possibilities.
The tender marks the fourth attempt to sell the airline. ÁPV scrapped the last tender for Malév in August 2005 without declaring a winner because of "business, professional and employment considerations."