A European investor consortium has today sent a buyout proposal directly to Latvia’s Prime Minister Andris Kulbergs offering to establish a new company, ACMI Riga, to purchase the state-owned airliner’s existing Lufthansa Group ACMI contracts. The deal would involve transferring the 18 aircraft Air Baltic is currently leasing for its aircraft, crew, maintenance and insurance, or ACMI, activities to ACMI Riga. The offer price is not detailed in the letter, seen by Octus.

Air Baltic’s ACMI business accounted for 20% of total revenue in 2025 at €157.5 million.

The investor group notes that the proposed spinoff would safeguard the up to 700 Air Baltic jobs that are currently at risk. Kulbergs’ party won last weekend’s elections in Latvia and he is set to remain in place as prime minister. Members of Kulberg’s government told Octus in September that Latvia wants to support Air Baltic through its financial crisis, adding that the government considers the airline a strategically important asset for the country.

The investor group is fronted by aviation strategist Oleg Evdokimov and backed by several European investors. The offer is now being reviewed by the Ministry of Transport, which owns 88.1% of the shares in Air Baltic. Lufthansa owns 10% of Air Baltic’s equity.

Latvia is also the Air Baltic’s largest creditor. Court filings also show the Latvian Environment, Geology and Meteorology Centre holds $42.4 million of unsecured claims related to Emissions Trading System payments. The government has also disclosed a $20 million loan and the state revenue service holds a $15.4 million unsecured claim. These positions take Latvia’s combined liabilities to about €117 million when including the €50 million of 14.5% 2029 notes, which are quoted at 10/14, according to Solve.

As part of Air Baltic’s ongoing chapter 11 restructuring, the company said that it plans to cancel several purchase contracts for about 40 Airbus aircraft, signed as part of the company’s now-abandoned expansion plans. On Sept. 15, the airline’s legal counsel told a New York court there are about 20 surplus aircraft according to the company’s most recent analysis and the debtors intend to renegotiate and reject certain aircraft leases.

On Sept. 15, Judge Lisa Beckerman in the Southern District of New York granted interim approval of the Air Baltic debtors’ €350 million new-money DIP financing ✐, overruling an objection from an ad hoc group of 2029 noteholders that argued the funding would impair their collateral. During the hearing, it emerged that Air Baltic filed for creditor protection on Sept. 14 with just €1 million of cash in its accounts.

Air Baltic’s final DIP hearing is scheduled for Oct. 9. Court approval would authorize the debtors’ €350 million new-money DIP facility on a final basis. However, Tranche 2’s €125 million DIP loans and Tranche 3’s €50 million DIP loans would remain subject to entry of a separate priming order. Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital and Strategic Value Partners are providing the DIP financing.

The proposed final DIP order includes a schedule for a separate priming order hearing on Nov. 17 to Nov. 18 and discovery deadlines, which would be “binding” unless modified by agreement or court order.

Prepetition Capital Structure

The company’s prepetition capital structure consists of about $1.6 billion of total debt obligations, including $584 million in funded debt, as summarized below.
 
The debtors’ largest unsecured creditors are as follows: