STA, 13 May 2021 - The specialised prosecution office has asked a court to formally open an investigation against former German owners and management of Adria Airways for financial misdeeds that allegedly led to the Slovenian flag carrier ending up in receivership in October 2019, according to a report by news portal Necenzurirano.
The portal names the suspects as former Adria Airways CEO Arno Schuster, his successor Holger Kowarsch, Klaus Platzer, who acted as financial advisor to the company from March 2016 to December 2017, and Eggo Laukamp, who from 2014 to 2018 served as director of purchasing at 4K Invest, the turnaround fund that bought Adria from the state in 2016.
The report says the prosecution has found evidence supporting the allegation that the quartet had siphoned EUR 3.5 million away from the carrier through consulting contracts. Once the court-led phase of the investigation is completed the prosecution will decide whether to file an indictment.
The portal reports that the law enforcement authorities have encountered major difficulties in trying to establish where the money from Adria has disappeared. It says the Germans had started covering their tracks when it had become clear the company's bankruptcy was inevitable.
They closed down companies in a intricate network leading from the UK to Germany and on to Luxembourg and Malta, a scheme that the portal says was designed not only to serve tax optimisation and to hide the real owners but also to make it harder to follow the money flows.
The alleged wrongdoing will have hurt some 2,900 creditors, who have reported more than EUR 150 million in claims in the receivership process. The official received admitted roughly EUR 88 million in claims, while the bankruptcy estate is much smaller, comprising EUR 2.6 million in cash and an estimated EUR 4.3 million in assets not yet converted into cash, according to the portal.
Since Adria went bankrupt, its operating licences have been auctioned off for EUR 45,000 to Air Adriatic, a firm incorporated by Slovenian produce importer Izt Rastoder, and the Adria Airways brand has been sold to Munif Otman Tarmum of the United Arab Emirates for EUR 33,400.
The carrier's flight school has been sold to an institute owned by Peter Jambrek, a jurist and chairman of the management board of New University.
An invitation to submit binding bids for Adria's office building and the appertaining land was published in April with the asking price set at EUR 4.1 million. The deadline for bids expires on 30 June.
STA, 4 June 2020 - The National Bureau of Investigation (NBI) is conducting house searches in the Kranj and Ljubljana areas over suspicion of abuse of office or rights in business, with the news portal 24ur reporting that these are related to the bankruptcy of the air carrier Adria Airways.
The website of the commercial broadcaster POP TV noted on Thursday that, as Adria Airways was about to go bust in late 2019, there were suspicions of wrongdoings and lack of transparency in the company's management and operations.
It was reported by the newspaper Delo in February that the police were investigating suspicion of abuse of office and business fraud, adding that some 5,000 US dollars had also gone missing from the company's safe.
According to 24ur, official Adria Airways receiver Janez Pustatičnik has confirmed that the house searches are being carried out at the company's headquarters.
The General Police Administration told the STA today that NBI investigators were visiting residential, commercial and other premises in the areas of Kranj and Ljubljana in the ownership of one legal entity and two individuals.
Two house searches are still under way and one has been concluded. Pre-trial investigation is being conducted against two foreign individuals.
Already in March, Pustatičnik hired an audit firm to analyse the company's documentation looking for evidence of potential misdeeds by the company's previous owners and management.
He said at the time that focus would be on collecting evidence of potential liability of the former management and detecting "avoidable actions" that may have resulted in asset stripping.
The spotlight will be on the German turnaround fund 4K Invest, which bought the company from the state in 2016 and oversaw a series of business decisions that led to the company's bankruptcy.
According to 24ur, the suspicious dealings include transactions to tax havens worth millions of euros, and conducting business through Malta.
An investigative portal has reported, however, that the group of companies around 4K Invest has been liquidated, with all traces of their transactions, many to tax havens, erased from the public domain.
All our stories on Adria Airways
STA, 5 May 2020 - Airline Adria Airways creditors have reported a total of EUR 151 million in claims to the bankruptcy estate of the company, which has been in receivership since last October. However, the official receiver has admitted only EUR 87.7 million in claims, while he valued Adria's bankruptcy estate earlier this year at EUR 6 million.
Official receiver Janez Pustatičnik accepted secured and unsecured claims by legal and physical entities to the tune of EUR 72.6 million, shows a list of examined claims he published on the website of the Agency for Legal Records (AJPES).
Claims by former employees for unpaid wages - Adria had more than 500 workers - amount to EUR 15.1 million. The majority are priority claims.
Former CEO Holger Kowarsch has EUR 67,600 in claims and Sven Kukemelk, who ran Adria's flight school, EUR 47,700.
The highest claim - EUR 6.6 million - is that of the German airline Lufthansa and its Austrian subsidiary Austrian Airlines (EUR 3.1 million), both unsecured.
The US's Aerocentury has EUR 4 million in unsecured claims (but EUR 37.5 million was disputed) and Rolls-Royce Corporation EUR 2.1 million.
A right to separate settlement due to a lien has been recognised to the company 8900973 Canada Ltd (EUR 3.6 million), Bank of America Merrill Lynch (EUR 1.3 million) as well as to Ireland's EIC Aircraft Leasing (EUR 195,000) and Sasof III Aviation Ireland (EUR 106,000).
The two Irish companies also have EUR 4.3 million and EUR 1.6 million in unsecured claims, respectively.
Fraport Slovenija, the operator of Ljubljana airport, has a right to separate settlement for EUR 4.2 million and another EUR 255,000 in unsecured claims. Intesa Sanpaolo bank has meanwhile EUR 4.5 million in conditional claims.
There are also several airports that have had their claims admitted, the highest being EUR 1.7 million claimed by Tirana's airport.
Darwin Airlines, a Swiss regional air carrier bought by Adria after the latter was taken over by the German fund 4K Invest, has a claim of EUR 455,000.
The claim of Eurocontrol, the European organisation for the safety of air navigation, is EUR 2.1 million.
FURS, Slovenia's revenue service, has EUR 162,000 in priority claims and EUR 139,000 in unsecured claims.
The country's health and pension insurance funds, ZZZS and ZPIZ, have EUR 58,000 and EUR 367,000 in priority claims, respectively.
In February, Pustatičnik said Adria's bankruptcy estate was worth EUR 6.2 million, of which EUR 3.1 million stemmed from the title to its office building at Ljubljana airport.
The state sold Slovenia's flag carrier Adria Airways to the German turnaround fund 4K Invest in 2016 for EUR 100,000 after recapitalising it with EUR 3.1 million.
The new owner was unable to give it a fresh impetus, so Adria was grounded at the end of September 2019 after almost 60 years since its establishment, and filed for receivership.
Last March, the official receiver selected an auditor to audit Adria in order to examine the possibility of claiming damages from its former leadership. The police are meanwhile investigating abuse of office and fraud.
All our stories on Adria Airways are here
Ex-Yu Aviation reports that events surrounding last year’s collapse of Adria Airways are now under investigation by the Slovenian police, who are looking into suspected abuse of office and fraud. Adria was last owned by a Luxembourg based German fund, 4K Invest, which liquidated a number of affiliated companies after the carrier’s collapse, making investigations of the circumstances more complicated. What’s more, 4K itself has closed its website and cut off its phone lines, as well as disappearing from business registries in a number of companies
The whole story is worth a read, and although no specific allegations are being made yet by the police, there are enough odd facts and suspect actions to raise questions as to whether 4K was ever sincere in its wish to run Adria Airways, and why the Slovenian government did not choose to find a strategic partner within the aviation industry.
All our stories on Adria Airways are here
STA, 4 February 2020 - The bankruptcy estate of air carrier Adria Airways is worth EUR 6.23 million, of which EUR 3.15 million is the title to its office building at Ljubljana airport. Official receiver Janez Pustatičnik believes that due to its complexity, the receivership procedure is unlikely to be completed before the end of 2024.
The assets also include Adria's brand, the liquidation value of which is EUR 100,000, a flight simulator (EUR 93,000) and Adria's 100% stake in its flight school (EUR 133,500), according to an opening report Pustatičnik published on the website of the AJPES agency for legal records on Tuesday.
Among its assets are also the operating licences, foremost the air operator's certificate (AOC), but have already been sold; last month they were bought by Air Adriatic, a company owned by Slovenian entrepreneur Izet Rastoder, for EUR 45,000.
Inventories are estimated at over EUR 1 million, but since they have not yet been fully documented, their estimated value could still change.
The bankruptcy estate also features operating receivables to the tune of EUR 1.44 million, which have however already been recovered.
Pustatičnik assesses the receivership procedure as very complex and demanding, so it could be completed only at the end of 2024.
He sees litigations, numerous recoveries and other procedures expected to be launched in Slovenia and abroad as the main hurdle to bringing it to a close earlier.
Adria also has EUR 543,000 on a bank account, but it is kept there to pay a creditor, an issue currently subject to litigation, so it is not included into the bankruptcy estate.
It is not yet know how much exactly Adria owns creditors, since the deadline to report them has been extended until 2 March.
The opening report was also published today by Blaž Poljanšek, the official receiver of company Adria Airways Flight School, which puts the assets of the flight school at EUR 172,000.
The biggest assets are four sport planes, estimated at a total of EUR 109,000.
The flight school, which is eyed by the Pipistrel ultra-light plane manufacturer, also has a licence for training professional and sport pilots.
Creditors of Adria Airways Flight School have reported EUR 448,000 in claims, with Adria Airways being the biggest creditor with some EUR 111,000 in claims.
The state sold Slovenia's flag carrier Adria Airways to Germany's turnaround fund 4K Invest in 2016 for EUR 100,000 after recapitalising it with EUR 3.1 million.
The new owner was unable to give it a fresh impetus, so Adria was grounded last September after almost 60 years since establishment and filed for receivership.
STA, 23 January 2020 - Adria Airways operating licences were auctioned off on Thursday to Air Adriatic, a newly established company owned by Slovenian produce importer Izet Rastoder, at the asking price of EUR 45,000.
"The auction was successful, the licences were sold at the asking price. There were three bidders. The asking price was accepted and there was no bidding," Adria receiver Janez Pustatičnik told the press.
Apart from Air Adriatic, the registration deposit was paid by Croatian company Komforia, and Dedal Aero, owned by former Adria pilot Dejan Slodej.
The buyer has three days to sign the contract and then pay the agreed sum within a month in order to acquire the rights that come with the licences.
However, in order to be able to use the licences the buyer will have to take certain steps to meet the criteria Adria met before its licence was revoked and the receivership launched, Pustatičnik explained.
Adria has some other assets, including its registered brand and some buildings, but the operating licences were considered some of the most valuable assets.
"This had to be sold as soon as possible, so the buyer can take all the necessary steps to be able to use the licences. The Civil Aviation Agency has extended this deadline until the end of September."
The buyer will be able to use all the benefits of Adria's membership in various organisations, and rent the remaining infrastructure of the former flag carrier until it is sold. This includes the brand name, building and equipment.
"The buyer cannot land anywhere for the time being because it does not fly. First, it must take all the necessary steps. The deadline for reporting to Germany whether the summer season will be carried out is 31 January."
After Pustatičnik examines the 2,800 claims reported, Adria's brand name will be put up for sale as well.
Following Adria's receivership in October, several potential buyers expressed interest in the group's licences, including its air operator's certificate (AOC), as well as its flight school.
Only a week ago, it was reported that investors linked to the Russian state-owned aircraft manufacturer Sukhoi had also confirmed their interest, but they did not show up for the auction.
Slovenia's former flag carrier Adria Airways, which was sold to the German financial fund 4K in 2016, went into receivership last autumn after years of financial difficulties.
After its collapse, the government considered founding a new carrier to preserve Slovenia's connectivity with the world but this option was ultimately dismissed as economically unfeasible.
However, the government is reportedly still looking for a way to have Slovenia better connected with four major European hubs - Frankfurt, Munich, Zurich and Brussels - through regional air carriers.
A solution is being draw up by the Bank Asset Management Company (BAMC) and is expected to be presented at the beginning of this year.
Pustatičnik refused to speculate on why the state did not bid for the licences today, noting only that BAMC officials had been collecting information about Adria in October and November.
The representative of Air Adriatic would not comment on the auction, while Adria's former pilot Slodej, who also took part in the auction, said Slovenia could have a profitable airline. "I hope the buyers know enough about the business that a success story will now unfold," he said.
He thinks the market is big enough but that the airline should have a different business model than Adria had.
Ex-Yu Aviation, always on top of the region’s air travel news, has added more details to an earlier report that Russian investors are interested in reviving the name Adria Airways, with the collapsed carrier’s remaining assets – its name, some training manuals and the all-important air operator's certificate (AOC) – due to be auctioned this Thursday, with a starting price of €45,000, although this is expected to be exceeded since the average price of an AOC in Europe is €300,000.
According to the report, the group of investors from Russian and the United Arab Emirates are, linked to Sukhoi, the Russian aircraft manufacturer, and would be using a fleet of Superjet 100. As Oleg Evdokimov, a representative of the Russian investors, told RTV SLO: "Adria Airways’ certificates allow us to operate not only out of Ljubljana but from any airport in Europe. The Slovenian market is very interesting. There is no real competition. Currently, it is only possible to fly to just ten destinations and the fares are very expensive.”
Mr Evdokimov went on to say “We plan to start in the summer with the primary task of providing flights for Slovenians and Austrians (from Villach and Klagenfurt) to primary vacation destinations. We plan to serve these routes with SSJ aircraft. The second goal is to compete with "weak" competitors such as Lufthansa and Swiss on three important destinations from Ljubljana: Zurich, Munich and Frankfurt.”
More details can be found at Ex-Yu Aviation.
With Adria Airways assets due to be auctioned next week, at 11:00 on Thursday 23 January, Ex-Yu Aviation reports that a group of unnamed Russian investors are interested in purchasing the collapsed airline’s Air Operators Certificate (AOC) and reviving the name to run services within Europe, using Sukhoi Superjet 100 aircraft. As reported earlier on TSN, the starting price for Adria’s assets, which include various training manuals in addition to the AOC, has been set at €45,000. However, a new owner would need to take on a number of obligations that remain after the carrier’s bankruptcy.
The airline’s previous owner, the Luxembourg-based German fund 4k Invest, purchased Adria from the Slovenian government in 2016 for €100,000. Since Adria’s collapse in 2019 an investigation into the role of 4K Invest and possible mismanagement has been launched, although the fund’s decision to liquidate its assets is complicating this.
While the closure of the national carrier lead to a 60% fall in Slovenia’s international seat capacity, a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.
Adria Airways finally collapsed in 2019, with investigations as to the role of its owner, 4K Invest, in the affair still ongoing. Since the closure of the erstwhile national carrier a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.
Meanwhile, what remains of Adria is being auctioned off, with the sale of its various licenses and permits expected in the coming weeks. Ex-Yu Aviation reports that the firm’s Air Operator Certificate (AOC) – which allows the holder to run commercial flights – is being offered at a starting price of €45,000. Purchasing the AOC would enable the new owner to restart Adria’s previous services from Slovenia and other EU Member States.
However, before you reach for your wallet note that the AOC would only be useful to a buyer who purchased Adria’s entire estate, as well as agreed to take on a number of obligations that remain after the carrier’s bankruptcy.
Two prominent names from Slovenian business who have been mentioned in connection with purchasing Adria’s assets are Joc Pečečnik, the founder of Interblock Gaming, and the “banana tycoon” (and property developer) Izet Rastoder.
According to reports by the news portal Siol.net, the companies through which the German 4K Invest group controlled Adria Airways, the Slovenian air carrier which declared bankruptcy this September, are shutting down one by one.
The disappearance of companies which were in control of Adria Airways since its purchase in 2016 will make it difficult for the bankruptcy administrator Janez Pustatičnik and law enforcement agencies to search for documents and information on millions of euros of transfers to tax havens and other countries, and to track assets to pay back tens of millions of Adria debts to creditors, reports Siol, continuing that criminal investigations into the business of the German owners of Adria are now ongoing. The investigation would probably include a forensic audit of Adria’s transactions, which would, says Siol, serve as the basis for legal actions against those responsible.