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State buys back Cargolux stake

By control on December 20, 2012

The Luxembourg government has, as widely predicted, agreed to buy back the 35 percent stake in Europe’s largest all-cargo airline, Cargolux, that it sold to Qatar Airways last year. The government said in a statement that it would pay the same price–$117.5 million–that it received in the original deal with Qatar Airways.

The repurchase is on an interim basis until terms are finalized with a buyer for the stake. China’s HNA Group, which owns a number of airlines including freighter operator Yangtze River Express, appears to be the favorite but the Russian Volga-Dnepr Group, which operates scheduled freighter services as well as heavy-lift and project cargo charters, is thought to be another interested party.

Qatar Airways seeks to become a bigger player in airfreight, by organic growth and acquisition, but Cargolux said its new shareholder had made unrealistic demands during strategy meetings in November. The other shareholders in lossmaking Cargolux are Luxair, a passenger airline in which the Luxembourg government has a stake of almost 39 percent, and two banks.

Cargolux, launch customer for the B747-8 freighter, lost $18 million in 2011 and its position has worsened this year.

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