Hungary govt to take 95 pct stake in airline Malev

BUDAPEST, Feb 27 (Reuters) - Hungary will almost fully renationalise air carrier Malev under a deal signed by the government and Malev's Hungarian and Russian shareholders in a bid to save the airline, the government said on Saturday.

Under the agreement, reached after lengthy negotiations, the Hungarian government will raise Malev's capital by 25.2 billion Hungarian forints ($127.8 million) by injecting cash into the company and converting its debts into equity.

This will result in the state holding a 95 percent stake in the airline, while the Russian shareholder AirBridge will have a 5 percent stake, the finance ministry said in a statement.

'The Hungarian state taking a majority stake (in Malev) will create the possibility for the company to operate in a financially stable way,' the ministry said.

(Reporting by Krisztina Than; Editing by David Gregorio) ($1=197.15 Hungarian Forint) Keywords: HUNGARY MALEV/GOVT ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.