The Serbian Minister for Finance, Sinisa Mali, has said the government will help Air Serbia repay two loans, of $52.9 million and $63 million dollars, to an SPV backed by Etihad, reported local news service Ex-YU Aviation.
The airline was recently rebuffed in its moves to have the debt, issued in 2015 and 2016 respectively written down by 82%.. Time is tight as the first loan matures in September. “We are negotiating with the creditors. While I can’t reveal the contents of those talks, I can say that we will certainly help Air Serbia. We are working towards resolving this problem together with our partners at Etihad Airways,” said Mali.
The two loans were issued by two international SPVs comprised of local and international investment funds Etihad Airways Partners I and Etihad Airways Partners II. They distributed $700 million in loans between the national carrier of the United Arab Emirates and its equity partners for capital expenditure and refinancing. In June, the carrier told the SPV that because of Covid 19 pandemic it might default.
“All carriers across the world are in an extremely difficult position. Our Air Serbia is no exception. This is likely the biggest crisis ever faced by the aviation industry, and, as a result, states must help their airlines. Due to the pandemic, and the corresponding economic crisis, the European Union has adopted new state aid rules. The rules have been significantly relaxed and enable the state to help improve the liquidity of companies which have been particularly affected by the coronavirus crisis,” said Mali.
“The Ministry for Finance has adopted two protocols, through which we have harmonised our regulations with the abovementioned European directives. Therefore, Air Serbia is a company of national interest and the state will help it,” he added.