Cargolux Plans Capital Increase, New aircraft, And Wage cuts
Cargolux (CV, Luxembourg Findel International (LUX)) has announced details of a new business plan aimed at turning around the loss making cargo carrier's financial position.
Its existing shareholders, with the exception of the government of Luxembourg which currently holds a 35% stake, are expected to provide $275 million USD in new capital through the issuance of convertible bonds in two installments, $100 million USD this and $175 million USD next year.
The investment will be used to increase Cargolux' fleet from 15 to 18 aircraft, preferably through the acquisition of additional B747-8(F)s.
As part of the business plan, Cargolux also hopes to cut yearly payroll costs by $10 million USD for the next five years and has started talks with its staff regarding a new labor agreement.
Luxair(LG, Luxembourg Findel International (LUX)) is Cargolux' largest investor and currently holds 43.4% in Cargolux with the other two shareholders besides the government being Luxembourg based banks BCEE and SNCI.
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