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Niki sale to BA owner IAG threatened by German court

Reuters  |  FRANKFURT 

By Maria Sheahan

(Reuters) - Niki's insolvency should have been filed in not Germany, a ruled on Monday, in a move which could unravel last month's deal to sell the Air business to owner

filed for insolvency in last month after Germany's scrapped plans to buy the Austrian airline, grounding its fleet and stranding thousands of passengers.

After hurried talks to find a new owner for before it lost its valuable runway slots, agreed to buy the business and make it part of low-cost unit

But Fairplane, a group representing passengers, said last week it had filed legal cases to have the insolvency proceedings for shifted to

argues Niki, which is registered as a company in Austria, had been profitable but lost access to bridge financing when insolvency proceedings were opened in in December.

It also says it sees a conflict of interest in the appointment of the same administrators for and its parent and debtor Air and declined to comment.

The regional for said on Monday a number of factors indicated that Niki's focus was in rather than in Germany, such as the fact that most of its workers had Austrian contracts, that its accounting was done in offices in and that it was operating under an Austrian license.

It said it would reverse a lower court's Dec. 13 decision to allow insolvency proceedings in Germany, but said the ruling would only take effect after a one-month period during which can appeal the decision in German federal

said it did not believe a reversal of Niki's insolvency filings in would scupper the airline's sale.

"As soon as there is an insolvency process for in Austria, the there can approve the deal agreed with IAG/in and pursue its implementation, it said in a statement.

said it was "committed to working with all relevant parties to proceed with the purchase".

A in Austria's Korneuburg is reviewing an application for a new insolvency process for there and said on Monday a decision would be made on Friday at the earliest.

(Reporting by Maria Sheahan; Additional reporting by and Kirsti Knolle; Editing by and David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 23:01 IST