With the objective of continuing the dynamic expansion of its leading market position in Eastern
Europe, strengthening the capital structure of the Austrian Airlines Group over the long term and
speeding up the necessary investments in quality, market position and flight production, the
Austrian Airlines ?-sterreichische Luftverkehrs AG is planning to implement an ordinary capital
increase later this year.The issue volume, that the Board of Management aims to achieve, totals around EUR 350 million.
In order to be able to achieve this, the first step must be to take a resolution regarding an
ordinary capital increase by a maximum volume of up to 68 million new shares. The capital
increase is to be implemented by way of an ‘at market bookbuilt offering’, whereby the precise
maximum number of shares, subscription ratio and maximum price are not fixed until immediately
before the beginning of the offering and the final price is not fixed until the end of the offering,
based on the existing order book. Bank Austria Creditanstalt and Merrill Lynch are to support
Austrian Airlines ?-sterreichische Luftverkehrs-Aktiengesellschaft in the implementation of the
capital increase as the issuing banks.
Shareholders in Austrian Airlines ?-sterreichische Luftverkehrs AG are invited to an Extraordinary
General Meeting of Shareholders to take place in the Austria Center Vienna at 10.00 a.m. on
2 November 2006. The most important item on the agenda will be the resolution regarding the
increase in share capital by up to 68 million new shares subject to consideration of the
shareholders« statutory subscription.
The syndicated shareholders support the planned capital increase of Austrian Airlines
?-sterreichische Luftverkehrs AG and have committed themselves to exercising their respective
subscription rights within the framework of the capital increase to retain the syndicate’s share of
50.02%.
As the current share price is below the calculated notional amount per share of EUR 7.27, a
simplified capital reduction is necessary in the run-up to the implementation of the capital
increase for technical reasons.
For this reason, the Board of Management will propose to the General Meeting of Shareholders the
simplified reduction of the calculated notional amout per share from EUR 7.27 to EUR 3.00.
The capital reduction will be implemented without the issue of capital to shareholders in the
company by means of a simple rebooking of EUR 145,180,000 from the share capital against the
balance sheet loss. With this measure, the share capital of Austrian Airlines ?-sterreichische
Luftverkehrs AG of EUR 247.18 million will be reduced to EUR 102 million, whereas the number of
shares issued remains unchanged. The reduction of the calculated notional amount per share will
not result in a loss of value for shareholders, since the value of the investment is solely driven by
the share price, which will not be affected by the capital reduction of the nominal value.
Austrian Chief Executive Officer Alfred ?-tsch made the following statement to mark the
launch of the capital increase: ‘This capital measure enables us to speed up our optimisation of
the Austrian Airlines Group and its earning power, and to improve its capital structure over the
long term. We will therefore be taking an essential step for the Austrian Airlines Group both in its
role as an engine for Austria as an economic location and as one of the leading European airlines
in the market for air traffic to Eastern Europe. We want to effectively secure our competitive
position and advantage in the Central and East European market in order to create a successful
long-term profile for ourselves in European aviation and to return the Austrian Airlines Group to
positive results as rapidly as possible. The measures we have already introduced to increase our
revenues, improve yields and to rationalise are being intensified. We are accelerating our Focus
East strategy from a solid foundation as a strong, renowned brand with an uncompromising
commitment to top quality, and the impact of that strategy is being maximised through our
efficient global partnerships and performance of our domestic hub of Vienna.’
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