Pressure mounts on SAirGroup over huge losses

A company representing minority shareholders in the SAirGroup's ailing French subsidiaries called on Thursday for more details on the aviation conglomerate's finances. Shares in SAirGroup ended Thursday at a seven and a half year low.

A statement from the corporate governance consultancy, Deminor, questioned the origin of losses at the French airlines AOM/Air Liberté.

It said investors wanted clarification of operations sanctioned by the SAirGroup and the other main shareholder, Marine Wendel, that may have unjustifiably weighed on the airlines’ results.

One of Deminor’s questions relates to the policy of enhancing the carriers’ fleets after the SAirGroup bought its stakes.

The SAirGroup declined to comment on the announcement. The group said earlier this month that the French airlines were causing a cash drain of SFr80 million ($47 million) a month. It has already stopped subsidies for Air Littoral and is due to take a decision on AOM/Air Liberté later this month.

The latest twist in the SAirGroup’s financial woes follows Tuesday’s announcement by Zurich’s director of public prosecutions that he had opened an enquiry into the company’s losses of almost SFr3 billion.

The investigation will centre on whether the company has offered an accurate picture of its financial situation. The probe could result in criminal charges.

Shares in the group dropped 3 per cent on Thursday on the Swiss Stock Exchange ending the session at SFr118.50 – a seven and a half year low. US investment house Merill Lynch cut SAir’s rating on Wednesday.

swissinfo with agencies