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"QR threatens to exit CV, 04 Oct
Qatar eyes a dominant role in Luxembourg's aviation. If the Emirate's demands are not fulfilled Qatar Airways could pull out of Cargolux.
The future fate Cargolux is facing is highly dependent on the outcome of political decisions between the Emirate of Qatar and Luxembourg's Government. Thus, the cargo carrier has become a minor bit in a much bigger deal with only very limited influence on the outcome.
According to sources close to the case the Qatari rulers have told their political counterparts in the Grand Duchy that Qatar could completely withdraw from all investments announced or already made in Luxemburg if their key demands are rejected. These include upping Qatar Airways' stakes from currently 35 percent to a controlling majority of well over 50, perhaps even 100 percent, observers say. Furthermore, Qatar seeks an equity stake in passenger airline Luxair, the major Cargolux shareholder (43,4%).
Responsible for the financing of the package would be Precision Capital, a Luxembourg-based Qatari investor. Since the enterprise is registered in the Grand Duchy, Precision is legally a national company. Therefore, investing in Luxair and taking over the carrier's Cargolux shares would not violate EU laws, saying that foreign investors are limited to 49 percent when buying into any airline registered in Europe.
If these moves would be blocked by Luxembourg's Government or legislative body the Qataris threatened to terminate their financial activities in the Grand Duchy entirely. This would include abandoning their financial activities after their recent announcement to intend to buy two major local banks.
According to local Radio Channel 100.7 loss-making Cargolux needs a capital injection valued 750 million euros within the next three to four years. Albert Wildgen, Helm of the carrier's Supervisory Board, who is considered being an intimate of the Qatari Government, did not comment on the case. All he told the radio was that "substantial cash" is needed to keep Cargolux in the air. Wildgen announced recommending the shareholders a "considerable capital increase" before year's end. The money is mainly needed to finance the airline's fleet renewal program.
Final decisions could be taken already at the controller's next meeting, scheduled October 11. Then, a new CEO could be appointed as well since the post is vacant after the airline's former boss Frank Reimen stepped down in July with Chief Financial Officer Richard Forson taking over the chair as interim CEO. Meanwhile, a pre-selection of candidates took place, while it is unclear at this stage if Forson's name is also in the pot.
Meanwhile, Luxemburg's biggest union Onafhaengege Gewerschaftsbond Letzebuerg (OGBL) urged the Government to block any changes in the carrier's existing shareholder structure. In a letter to some cabinet members, among them Finance Minister Luc Frieden, the OGBL demanded a positive and clear commitment to Cargolux and Luxair's Cargo Center at Luxembourg Findel airport. OGBL President Andre Roeltgen further called for postponing the Cargolux controller's meeting. The views are so controversial that it is too early for taking any new decisions."
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Maybe now some people will start to believe the numbers above. Basically CV is in a lose-lose situation. Either Qatar gets full control over CV (making sure the employees get the worst possible contracts) or they backtrack completely out of CV and leave the company in the worst financial limbo...