Government to take 20 per cent stake in new airline
Under the new rescue package for Switzerland's collapsed airline, Swissair, both industry and government have come to its aid by providing a total of SFr4.24 billion.
The state will pay the lion’s share of the rescue package, providing SFr1 billion as bridge financing to allow a scaled down version of the company to continue long-haul flights until April 2002.
The Swiss government, which has already provided SFr450 million to keep Swissair’s planes flying, will also take a 20 per cent stake in the regional airline, Crossair, for SFr600 million.
Some Swiss cantons, including Zurich and the two Basels, and the city of Zurich will provide seven per cent of the overall financing and invest a total of SFr460 million into the new airline, representing an 18 per cent stake.
Private companies will contribute around SFr1.7 billion to the new airline, including SFr350 million promised by UBS and Credit Suisse. The two banks already invested SFr260 million in Crossair earlier this month.
Switzerland’s telecommunications operator Swisscom has announced it will invest a maximum of SFr100 million in the new airline with the drugs group Novartis agreeing to contribute the same amount.
The list of other corporate contributors includes Nestle, Hoffmann-La Roche, Swiss Life, Zurich Insurance, Kudelski, Ciba Specialty Chemicals and Swiss Re.
Germany’s Deutsche Bank is the only foreign investor.
Time-consuming negotiations
The economics minister, Pascal Couchepin, told swissinfo that deciding on the rescue package was very difficult and time-consuming as there were so many shareholders. “It took us more than seven hours of negotiations with various shareholders to finalise the agreement,” he said.
The decision comes after a week of intense talks with Swiss industry to find private investors to back the rescue plan in order to prevent Swissair from being grounded for the second time in one month.
On October 5 Swissair was granted a debt moratorium after the sharp drop in air travel since the September 11 terrorist attacks on New York and Washington.
It was not clear on Monday whether the European Commission would give its backing to the deal under its competition rules, which seek to ban states from propping up their airlines.
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