Loftleidir Icelandic – a subsidiary of Icelandair Group – has together with Icelandic investors submitted a binding offer for a 51 per cent of the shares in Cabo Verde Airlines on Cape Verde.
Authorities in Cape Verde and Loftleidir Icelandic have been cooperating for some time. In August 2017, Loftleidir Icelandic signed a management agreement with the Cape Verde Government on restructuring Cabo Verde Airlines. No purchase price has been revealed.
The agreement also aimed to strengthen the international airport in Cape Verde, to develop the islands as a promising tourist destination and to build an international hub for connecting flights. Coinciding with the agreement, it was announced that the company was due to be privatised. Cabo Verde Airlines already has operating licenses to fly scheduled flights to Europe and the United States.
The acquisition will partly be paid for by the work already completed by Loftleidir Icelandic’s employees. The acquisition is made through a new company, Loftleidir Cabo Verde. Loftleidir Icelandic holds a 70 per ent stake in the company, and other investors 30 per cent.
Loftleidir Icelandic’s acquisition of Cabo Verde Airlines does not have significant effect on Icelandair Group’s financial statements since Cabo Verde Airlines will not be reflected in the group’s consolidated financial statements. The share will classified as an associated company.
Loftleidir Icelandic managing director, Árni Hermannsson said: “The participation in the acquisition of a majority share in Cabo Verde Airlines holds great opportunities for Loftleidir Icelandic, especially in light of the expected growth in passenger demand in Africa in the coming years.”
He added: “In developing connecting routes, we can also draw further on Icelandair’s experience. In the case of Cabo Verde Airlines, we have opportunities for well-organized connecting routes between Europe and South America on one hand, and West Africa and North America on the other, along with West Africa and Europe. The island’s location is ideal for developing connecting flights.”