August 24 (SeeNews) - Serbia's government is in talks with the creditors of Air Serbia on the repayment of the company's debt, local media quoted finance minister Sinisa Mali as saying.
"Negotiations are underway with creditors. I cannot give details but what I can say again is that we will certainly help Air Serbia. Together with the partners from Etihad, we are working on solving the problem," daily Politika on Sunday quoted Mali as saying.
Last week, EA Partners, an entity linked to Etihad Airways, rejected a proposal by flag carrier Air Serbia for an 82% reduction of a loan extended to the company in order for the borrower to continue to operate until the repayment date and generate and accumulate the necessary cash to make such payment once trading activities recommence. According to media reports, Air Serbia needs to repay 56.5 million euro ($66.9 million) to EA Partners in September.
In June, Serbia's President Aleksandar Vucic said the government plans to hike the capital of Air Serbia and is ready to increase its stake in the company should equity partner Etihad Airways refuse to take part in the transaction.
Air Serbia notified in June EA Partners of a potential default under debt agreements signed with special purpose vehicles EA Partners I and EA Partners II, dated September 15, 2015, and May 20, 2016, respectively.
The Abu Dhabi-based airline holds a 49% stake in the capital of Air Serbia, while the remainder is controlled by the Serbian government.
($ = 0.84493 euro)