November 18 (SeeNews) - Romanian low cost carrier Blue Air said on Friday that it is ready to hand over 75% of its shares to Romania's finance ministry over unpaid debt.
On November 18, the company's shareholders were contacted by telephone by AAAS representatives requesting a meeting to specify the technical details of the shares handover, Blue Air said, adding that as soon as this legal process is completed, it will announce the new shareholding structure.
On Thursday, the finance ministry said it plans to take over a majority stake in low cost carrier Blue Air after the air carrier failed to make payments on a 300.75 million lei ($63 million/61 million euro) loan which was guaranteed with 75% of the company's stock.
"The action was made necessary by repeated non-fulfillment of repayment obligations assumed by Blue Air within the framework of the state aid, namely the non-payment of interest and capital installments related to the credit contracted with the state guarantee," the ministry added.
The loan was granted in 2020 to help the company avoid bankruptcy due to the COVID-19 pandemic.
Blue Air suspended flights in September, after the environment ministry blocked its accounts. A day later, the ministry unblocked its accounts and the Environment Fund Administration rescheduled its 28 million lei debt in 12 monthly payments.
The air carrier aimed to restart flights on October 10, but failed to do so, announcing that its is discussing with potential investors, creditors and the Romanian government to restructure itself.
Blue Air also said at the time that its total debt amounts to 230 million euro ($238 million), or half of its annual revenues.
Blue Air, the only air carrier in Romania with 100% domestic capital, started operations in December 2004.
In July, Romania's consumer protection authority fined Blue Air with 2 million euro for cancelling over 11,000 flights over a 12-month period.
At the end of October 2021, Ridgecrest, an AIM-listed cash shell, terminated negotiations on its proposed reverse takeover of Blue Air. The decision was a consequence of the airline's inability to raise the pre-reverse takeover funding, which was was the main condition of the non-binding heads of agreement between Ridgecrest and Blue Air's vendors announced in July, Ridgecrest said at the time.
($=0.967 euro)
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