RO state unlikely to recover EUR 60 mln post-Covid rescue loan from Blue Air

The RON 300 mln (EUR 60 mln) loan extended by state-owned bank Eximbank to private airline Blue Air some one year and a half ago is unlikely to be recovered since the company's financial situation was assessed as problematic by the bank even from the moment of the contract.

The loan was extended with state guarantees, and was aimed at helping the company recover from the losses incurred during the lockdown period.

"There is significant uncertainty about the company's ability to continue as a going concern and a high risk of not honouring its financial obligations," according to an analysis drafted at that time by Eximbank on to the economic and financial situation of Blue Air, quoted by Profit.ro.

Eximbank's conclusion shows that the value of the company was, at that time, negative.

Romania Libera reported in July 2022 that indeed the Government is already servicing the debt from its own funds since October 2021.

On August 19, 2020, through Emergency Ordinance 139, the Government decided to grant state aid to the companies Tarom and Blue Air to compensate for the economic losses suffered due to the Covid pandemic. The procedure is supervised by the European Commission.

RO Govt. to guarantee bank loans for Tarom, Blue Air

(Photo: Kittichai Boonpong/ Dreamstime)