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airberlin is achieving substantial recapitalisation as the basis for an accelerated turnaround leading to sustainable profitability

April 27, 2014

(DGAP-Media / 27.04.2014 / 22:07) - Cash inflow amounting to a total of 450 million euros for accelerated turnaround - Of that, 300 million euros through subordinated perpetual convertible bond - Strengthening of capital and liquidity - Bond issue to fund exchange offer for existing bonds due 2014 and 2015 and to raise an additional 150 million euros - Strengthening of the Management Board with a deeper focus on accelerated and intensified operational restructuring and revenue generation - Best customer service for guests and partners remain core principle - 2013: a challenging year with an operating loss of 231.9 million euros airberlin has set necessary preconditions to accelerate and deepen the turnaround leading to sustainable profitability. By means of a substantial recapitalisation, the company will receive a cash inflow of 450 million euros before the end of 2014, equipping airberlin with an improved financial structure for a deeper and comprehensive restructuring. This recapitalisation is based on two pillars: first, Etihad Airways has subscribed to a convertible bond in the amount of 300 million euros. As this is a perpetual subordinated bond, it will be posted as equity under IFRS accounting principles. Second, in order to further strengthen the financial structure, airberlin will issue a bond in the amount of a minimum of 150 million euros. This bond is arranged by Anoa Capital. The proceeds will be used for general corporate financing purposes. Further the holders of the 2014 and 2015 bonds will be offered to exchange their existing bonds at preferential terms as set out in the exchange offer into the new bonds with a maturity in 2019. In addition, airberlin has a partially undrawn credit facility from its largest shareholder, the maturity of which has been extended from 2016 to 2021. After the recapitalisation the current ownership structure of Air Berlin PLC will remain unchanged. To strengthen management capacity for the turnaround-process, the Management Board of airberlin will be expanded to include the function of a Chief Restructuring Officer (CRO). Effective May, Marco Ciomperlik will take up responsibility to coordinate and drive the restructuring and turnaround process in his role as CRO. In previous years, Marco Ciomperlik has worked in a leading role in consultancy companies and the last five years in the role of Chief Maintenance Officer at airberlin where he successfully implemented restructuring projects in his area of responsibility. As already announced GÖtz Ahmelmann will assume responsibility as Chief Commercial Officer as of 1 July 2014. GÖtz Ahmelmann has extensive experience in all commercial areas of aviation, most recently as of Head of European Sales at airberlin's main competitor. "On the basis of an improved financial structure, with a strengthened management capacity, we are able to intensify and accelerate the fundamental restructuring of the business," said Wolfgang Prock-Schauer, CEO airberlin. "Even though the Turbine efficiency program has delivered according to plan and will take full effect in 2014, we have to increase the pressure during implementation, drive further measures as well as thoroughly evaluate our possible courses of action including airberlin's long-term business model. This restructuring will focus on efficiency, while our core proposition to offer best service to our guests and partners remains unchanged. We value the confidence our shareholders and the capital market have placed in us to enable a more fundamental restructuring." Wolfgang Prock-Schauer also called upon Germany's authorities to put more emphasis on creating a positive business environment for the aviation industry including the abolishment of the aviation tax. For airberlin, last year's tax payment amounted to 142.9 million euros. "With our successful and comprehensive recapitalisation we have the necessary financial breathing space to deeply restructure the airline and bring it back to operative profitability. We are putting out an attractive offer to exchange the 2014 and 2015 bonds with the aim to further ease and streamline the maturity profile going forward in order to support the focus on operational restructuring", said Ulf HÜttmeyer, Chief Financial Officer of airberlin In 2014 already scheduled further Turbine measures will be implemented with the introduction of a new Revenue Management System, the further optimisation of the airline's network and fleet structure and improvement of staff productivity. Furthermore, the synergies with partners Etihad Airways on the one hand and oneworld(R) carriers on the other hand will show continuous improvements. To evaluate the efforts and support the top management in the implementation of a deeper and more radical restructuring airberlin will commission a management consultancy. These intensified efforts have to be seen in the context of a challenging environment. airberlin closed the 2013 financial year with an operating loss (EBIT) of 231.9 million euros. The Turbine efficiency program achieved the desired contribution of 200 million euros to the cost and turnover side and a number of performance indicators delivered positive results. However, the company was faced with an unexpectedly sluggish summer season due to high temperatures in Central Europe, followed by the traditionally difficult winter period. airberlin carried 31.5 million guests last year, the fourth year in succession in which the company exceeded the 30-million mark. By focussing on core routes airberlin managed to achieve a better market position and to increase capacity utilisation by five percentage points to 84.8%. Optimised flight schedules enabled the company to reduce the fleet by 15 aircraft to 140 and to increase its leading market position in its two most important hubs Berlin and Dusseldorf. With a reduced capacity offer of 5.1%, group revenues fell by 4% to 4.147 billion euros. The yield (revenue per passenger) increased by 0.8% to 121.0 euros (previous year: 120.1 euros). Revenue per available seat kilometre (RASK) increased in 2013 by 1.3% to 7.24 euro cents (previous year: 7.15 euro cents) while the costs per available seat kilometre (CASK) rose by 3.5% including fuel and restructuring charges. Collaboration with Etihad Airways and other partners was further expanded last year. The partnership with Etihad Airways led to a significantly higher shared turnover of 200 million euros on joint codeshare routes. More than 560,000 joint codeshare passengers flew in the network - an increase of 75.3% compared to the previous year. The number of flight guests on joint codeshare routes with oneworld partners also increased significantly in 2013 to over one million, and more than doubled compared to the previous year. As at 31st December 2013 and therefore before the recapitalisation, airberlin had equity capital of minus 181.9 million euros, liquid assets of 223 million euros and a partially undrawn credit facility of US$ 120 million. airberlin is one of the leading airlines in Europe and flies to 147 destinations worldwide. The second largest airline in Germany carried more than 31.5 million passengers in 2013. airberlin offers a global route network through its strategic partnership with Etihad Airways, which has a 29.21% share in airberlin, and throughmembership of the oneworld airline alliance. The airline with the award-winning service operates codeshare flights worldwide with 16 airlines. The fleet has an average age of five years and is among the most modern and eco-efficient in Europe. Press Contact: Uwe Berlinghoff Senior Vice President Communications phone: +49 30 3434 1500 fax: +49 30 3434 1509 e-mail: abpresse@airberlin.comwww.airberlin.comwww.facebook.com/airberlin End of Media Release --------------------------------------------------------------------- Issuer: Air Berlin PLC Key word(s): Enterprise 27.04.2014 Dissemination of a Press Release, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Air Berlin PLC The Hour House, High Street 32 WD31ER Hertfordshire, Rickmannsworth United Kingdom Phone: +49 (0)30 3434 159 0 Fax: +49 (0)30 3434 159 9 E-mail: ir@airberlin.com Internet: ir.airberlin.com ISIN: GB00B128C026 WKN: AB1000 Indices: SDAX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, DÜsseldorf, Hamburg, Hannover, MÜnchen, Stuttgart End of News DGAP-Media --------------------------------------------------------------------- 264891 27.04.2014


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