Malev To Get Capital Injection

Russia's Vneshekonombank will inject a further EUR10 million euros (USD$13.97 million) into loss-making Hungarian carrier Malev, the bank said Tuesday.

Anatoly Ballo, Malev's Chairman and Vneshekonombank Deputy Chairman told a news conference that the bank would raise the capital of Malev, whose difficulties have been exacerbated by the global crisis, by the end of May.

The bank holds 49 percent in AirBridge, the owner of Malev, while the rest of the shares are owned by Hungarian businesswoman Magdolna Kolto.

The capital increase will not change the ownership structure of Malev, which has posted heavy losses in recent years.

Earlier this year Malev's owners decided on a HUF3 billion forint (USD$14.95 million) capital increase.

Last month the bank also provided a EUR20 million loan facility to the carrier which will be partly used to finance Malev's fleet transformation program, the Hungarian company said in a statement.

Malev's board of directors has approved the airline's budget plan for 2009, but details would be published only after the company's employees are informed about the plan, Malev officials said.

"The Board (of Malev) requested the management to prepare a three-year business plan to enable Malev's positive performance," Ballo said, adding that the firm would cut its staff but the numbers would be decided later, pending market conditions.

Malev can become profitable in three years, he said.