Swissair Group has proposed a new rescue package for its loss-making Belgian subsidiary, Sabena. The deal is part of Swissair's ongoing efforts to free itself from a commitment to increase its stake in the Belgian carrier to 85 per cent.
Under the new deal proposed on Monday, Swissair and the Belgian government would jointly invest 275 million euros (SFr419 million), each paying half of the sum. Swissair says it would also agree to lend Sabena 30 million euros (SFr46 million), bringing the total amount to 305 million euros.
The Swiss carrier has also said it would not invest any more money in Sabena if the deal were to be accepted. Belgium has until July 4. to decide on the proposal.
Swissair holds a 49.5 per cent stake in the carrier, with the Belgian government holding the rest of the shares. Swissair also has a commitment to increase its holding to 85 per cent but is now unwilling to do so because of its financial problems.
Belgium says Swissair had agreed to take responsibility for Sabena's ground handling, cargo and catering subsidiaries as well as providing for the company's financial needs for 2000-2001.
Last week, the Belgian government dismissed Swissair's offer of an unspecified payment in return for being released from its obligation to increase its stake.
Monday's offer came after Swissair agreed on Saturday to sell its 49 per cent stake in the French regional airline, Air Littoral, to the French airline's former chief executive, Marc Dufour. Swissair's boss, Mario Corti, said the agreement would guarantee "a solid future for a large part of the workforce" of 1,100 people.
Air Littoral said the deal would allow it to keep 31 of 39 aircraft in the air and it said that it hoped to keep job losses to a minimum.
The sale is part of Swissair's strategy of withdrawing from its foreign investments after posting losses of almost SFr3 billion last year. The divestment leaves Swissair tied to two other French carriers, AOM and Air Liberté, which filed for insolvency last month.
Shares in Swissair are down more than 60 per cent since the beginning of the year.
swissinfo with agencies