Vienna - Austria's flag carrier Austrian Airlines(AUA) said Monday that a key Saudi investor was set to pull out of a 150-million-euro (232-million-dollar) deal designed to shore up the ailing airline. Austrian Airlines confirmed receiving a letter from lawyers representing Mohamed bin Issa al-Jaber, informing them of the investor's intention to scuttle the deal.
The company however rejected having left al-Jaber in the dark about its 60.4-million-euro net losses for the first quarter of 2008. The investor claimed he had received misleading information on the airline's financial situation when negotiating his investment in March.
According to Austrian news reports, al-Jaber had agreed to pay 7.1 euros per share, after the release of its first quarter results but AUA's share price dropped to around 4 euros.
Together with main shareholder OIAG, Austria's privatization holding, AUA was continuing "intensive talks" with al-Jaber, the airline said and stressed that it did not regard the letter as a legally binding form of cancelling the contract.
The deal would have given al-Jaber an approximately 20-per-cent stake in the company, currently valued at 450 million euros and would effectively prevent takeover plans by foreign airlines, as AUA's independence remains a main objective both for politicians and management.
