Hungary injects cash in Malev

BUDAPEST: Hungary's government has to inject 18.5 billion forints ($97.25 million) into loss-making airline Malev by end-August to raise its equity, Hungarian daily Magyar Hirlap said on Saturday.

The increase is necessary even after Malev's shareholder meeting on Friday decided to raise its capital by 4.5 billion forints, because the company still has negative equity, the paper said, citing the state National Asset Management company (MNV).

MNV told the paper that Malev's equity capital is currently at a negative 22.5 billion forints and would thus have to be increased by a total of 23 billion forints by Aug. 25 under current legislation on corporations.

The first step of this capital increase was decided on Friday, and a second step would come by August, the paper said.

Hungary's attempts at privatising loss-making Malev have failed and last year Hungary bought back all but a 5 percent stake from a group of investors including Russia's Vneshekonombank.

In Dec. 2010 European Union competition regulators opened an in-depth investigation into Malev saying it may have received illegal state aid.

Copyright Reuters, 2011