MIAMI – Polska Grupa Lotnicza (PGL) – the owner of LOT Polish Airlines – today announced its withdrawal from the purchase of Condor Airlines (DE).
In a conversation with ISBnews, PGL Corporate Communications Office Director Katarzyna Majchrzak confirmed that that the “Polish Airline today informed Condor about withdrawing from the purchase of the company,” adding no further comments.
It is understood that the DE was not able to meet the conditions of the investment agreement, not showing the financial and operational condition to allow it to continue operating after the bankruptcy proceedings.
The COVID-19 crisis affects the agreement conditions
In January 2020, PGL concluded an investment agreement with DE, which assumed the acquisition of shares in the German company after meeting certain conditions. In the event of non-compliance, PGL could withdraw from the transaction.
According to forsal.pl, DE, in its insolvency proceedings, had obtained creditors’ approval for the transaction and documents guaranteeing that its operational and financial standing allowed it to keep flying in line with business assumptions.
But according to market analysts, as aircraft groundings mount, the operations of these lines may be at risk due to the COVID-19 pandemic.
Thus, as DE primarily operates charter flights, its operations make it particularly vulnerable to the fallout of the crisis that is stifling the aviation industry almost completely.
The transaction was to be completed by the end of April 2020 at an undisclosed value.