October 27 (SeeNews) - Romanian low-cost carrier Blue Air said that it has received the first half of a 300.8 million lei ($73 million/62 million euro) state-guaranteed loan from the country's state-owned EximBank.
Blue Air used this first tranche of the loan to fully repay its debt to the Romanian state, it said in a press release on Monday.
The six-year loan is guaranteed by Blue Air's assets, including 75% of the shares of Blue Air Aviation S.A. and of the main shareholder, Airline Invest S.A.
The state-backed funding is expected to compensate for the economic losses suffered by the company as a result of the pandemic in the March-June 2020 period, as well as partially cover liquidity needs during September 2020 - February 2021.
"Obtaining the state guarantee for the granting of the loan of 300.775 million lei 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," Blue Air CEO Oana Popescu said.
"This funding was the basis for Blue Air's decision to resume scheduled flights from July 2020 - making it possible to cover losses and liquidity shortfalls caused by the suspension of flights,” the CEO added.
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 on the matter. Under Romanian law, emergency decrees take effect immediately but have to be approved by parliament.
The European Commission approved the loan under its state aid rules in August.
Blue Air, the only air carrier in Romania with 100% domestic capital, announced in July that the Bucharest municipal court has approved its request to enter a concordat procedure with its creditors in order to avoid insolvency.
(1 euro=4.8718 lei)