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Tue 6 Dec 2011 06:43 PM

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Etihad refutes claims it will take Air Berlin stake

UAE carrier says report on interest in Germany's second-biggest airline is 'inaccurate'

Etihad refutes claims it will take Air Berlin stake
Etihad Airways
Etihad refutes claims it will take Air Berlin stake
Air Berlin

Etihad Airways dismissed a report that it would take a stake in Air Berlin, after a magazine reported Germany's second-biggest carrier would announce the deal this week.

"The entire report is inaccurate," a spokesman for Abu Dhabi-based Etihad said in an e-mailed statement on Tuesday.

"We never comment on speculation of this nature, except to say that we talk regularly and frequently to many airlines and a range of other businesses from all over the world about issues and opportunities," he said.

Germany's Manager Magazin earlier cited industry sources as saying Etihad planned to take a minority stake in Air Berlin via a capital increase and a deal would be announced this week.

The magazine said Air Berlin's board would hold a meeting on Wednesday to discuss the matter.

"There will be a normal board meeting that has been planned for months, at which the company's results will be discussed," said an Air Berlin spokesman who declined further comment.

Shares in Air Berlin were down 4.1 percent at 2.39 euros late on Tuesday, having earlier jumped as much as 5.7 percent.

"Now investors are afraid of a capital increase because nobody knows how big it could be," a trader in Germany said.

Etihad has repeatedly been named by German media as a possible investor for Air Berlin. Most recently, Sueddeutsche Zeitung said two weeks ago that Air Berlin, Germany's No.2 after Lufthansa, was looking for a partner and was in talks with both Etihad and HNA Group, owner of Chinese carrier Hainan Airlines.

Royal Bank of Scotland analyst Andrew Lobbenberg said in a note on Monday that while any buyer would get "a lot of airline for not much market cap," he believes neither Gulf carriers nor China-based airlines have any need for a hub in Berlin.

Air Berlin has had a rocky ride this year, with founder and Chief Executive Joachim Hunold stepping down in August after failing to deliver profit for several years.

Its shares have lost more than a third of their value since the start of the year, giving Air Berlin a market value of 212m euros ($286m).

The company already has several major shareholders. Turkey's ESAS Holding, owned by the Sabanci family, has a 16.5 percent stake and TUI Travel Plc holds 6.9 percent, according to Air Berlin's website.

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