Romania’s Blue Air secures first tranche of state-guaranteed € 62 million bailout loan
BUCHAREST, Romania, October 27 (SeeNews) – Romanian low-cost airline Blue Air said it had received the first half of a state-guaranteed loan of 300.8 million lei ($ 73 million / 62 million euros) from the country’s state-owned company EximBank.
Blue Air used this first tranche of the loan to fully repay its debt to the Romanian state, she said in a statement on Monday.
The six-year loan is guaranteed by the assets of Blue Air, including 75% of the shares of Blue Air Aviation SA and the main shareholder, Airline Invest SA
The state-supported funding is expected to offset the economic losses suffered by the company as a result of the pandemic during the period March-June 2020, as well as partially cover liquidity needs between September 2020 and February 2021.
“Obtaining the state guarantee for the granting of the 300.775 million lei loan was an extremely complicated process, much delayed compared to forecasts, during which we had to make many adjustments to the initial plan presented. to the Romanian and European authorities, as well as to our creditors, ”said CEO of Blue Air, Oana Popescu.
“This funding was the basis for Blue Air’s decision to resume scheduled flights from July 2020 – helping to cover losses and cash shortages caused by the flight suspension,” added the CEO.
The loan was approved by the government through an emergency decree in August. However, the decree was rejected on October 21 by the Romanian Senate. The lower house of parliament, the Chamber of Deputies, will have the final say in the matter. Under Romanian law, emergency decrees take effect immediately but must be approved by parliament.
The European Commission approved the loan under its state aid rules in August.
Blue Air, the only 100% nationally owned air carrier in Romania, announced in July that the Bucharest municipal court had approved its request to initiate composition proceedings with its creditors in order to avoid insolvency.
(1 euro = 4.8718 lei)