Minister of Climate Kristen Michal proposed terminating negotiations with two companies vying to purchase Nordic Aviation Group (NAG) due to financially insufficient offers and unsuitable conditions. While NAG will continue operations, cost reductions are planned to stabilise the business.
The Ministry of Climate cited inadequate financial offers, unfavourable conditions for the seller, and insufficient capital disclosure by one bidder as reasons for ending the sales process. Undersecretary Sander Salmu emphasised cost reduction and contract renegotiation to enhance profitability, aiming for stability and eventual privatisation.
Nordica’s situation impacts state-owned Transport Asset Management (TVH), which leases aircraft to Nordica. While NAG seeks independence through restructuring, potential future sales of NAG or TVH are considered.
European companies have shown interest in NAG, but their identities remain confidential. The climate ministry emphasised maintaining NAG’s operations to maximise Transport Asset Management’s market value.
Founded in 2015 to ensure Tallinn flight connections and market competition, NAG includes Nordica, Xfly, and Nordic Aviation Advisory OÜ, all fully owned by the Estonian state. Despite ceasing Tallinn flights in 2019, NAG employs 314 people in Estonia.
Source: ERR.ee