The increase of government shareholding to 90% of the shares in the national air carrier – Estonian Air Ltd was finalized in the middle of November, after the Estonian Parliament approved changes to the 2010 state budget allowing the government and Scandinavian Airline Systems (SAS) to recapitalize the company with ~20 MEUR. SAS will continue as a minority shareholder and Estonian Air can now proceed with the purchase of new Bombardier CRJ-900 NextGen aircraft as part of its long awaited fleet renewal plan.

Tamme Otsmann Ruus Vabamets advised the Estonian government, through the Ministry of Economy and Communications, in the acquisition. The firm undertook the legal due diligence exercise of the airline, assisted in formalization of the share capital increase as well as advised in the negotiations of the new shareholders agreement.

“This landmark transaction shall recapitalize the national airline and provide the company with a strong majority shareholder. As a result of the new aircraft to be delivered already in the beginning of 2011, Estonian Air will increase travel connections to and from Tallinn airport, thereby improving the Estonian investment climate in general” noted Tõnis Tamme, partner of the firm in charge of the assignment, who was assisted by his colleagues Ergo Blumfeldt, Liina-Maarja Uuemõis, Karmen Turk and Ramil Pärdi.