EC gives RO airline Tarom six months to come up with credible restructuring plan

Romania’s Government received the green light from the European Commission (EC) to extend a EUR 36.7 million loan to the state-owned airline Tarom, which will return it within six months or come up with a comprehensive and convincing restructuring plan to be approved by the Commission.

Failure to comply with either of the two alternatives will result in the Government preparing to liquidate the company.

The EUR 36.7 million loan is aimed only at securing the necessary working capital needed by the company over the six-month period and Romania’s Government will closely monitor the expenditures.

The European Commission approved the aid to prevent disruptions in the airline’s operations.

The aid approved by the EC is lower than the RON 195 mln (EUR 40 mln) emergency loan approved by the Romanian Government at the end of January.

Tarom has operated on a loss for many years. In 2019, the company’s losses were estimated at over RON 171 mln (EUR 36 mln) while the revenues were RON 1.51 bln (EUR 317 mln), according to the company’s latest budget approved at the end of 2019.

(Photo: Pixabay)