Romanian state to name two representatives in Blue Air’s board

The Romanian state will have two representatives with veto rights in the board of directors of Blue Air, the biggest Romanian airline, controlled by private investors, Profit.ro reported.

This is one of the conditions the Government has set for granting the company state guarantees for loans worth RON 300 million (EUR 62.5 mln).

The company requested the Government’s support to withstand the effects of the COVID-19 crisis.

The state guarantees will fully cover the value of the loan plus the interest and fees. Blue Air won’t be allowed to pay any dividends or repay loans contracted from its shareholders until it fully pays the loans guaranteed by the state. Any significant asset sale or purchase needs to be approved by the board.

The company can’t give up any of its aircraft or assets used for core operations without the Transport Ministry’s consent.

Blue Air will have to use the money from the new loan to pay its debts to the state budget, repay a RON 30 mln loan from Eximbank and the corporate bonds worth EUR 6 mln held by SIF Banat-Crisana.

In 2019, Blue Air recorded a turnover of RON 2.19 bln (EUR 456 mln) and a net profit of RON 72 mln (EUR 15 mln). The COVID-19 pandemic and the related restrictions strongly impacted its operations, as many flights were canceled.

(Photo source: Facebook/Blue Air)