Romania's Govt. to approve rescue aid for state airline Tarom
Romania’s Government discussed on Thursday, January 16, a memorandum for granting in 2020 a rescue aid, supplemented by restructuring aid, to the national air carrier Tarom.
The initial rescue aid approved by the Government amounts to EUR 40 million, Profit.ro announced.
The terms of the support provided by the Government (aid vs. loan) remain unclear.
Romania’s Government is ready to extend EUR 157 mln to Tarom, which has been struggling with financial and operational problems for many years, transport minister Lucian Bode said in December. The solution was proposed by the external consultant contracted by Tarom, who recommended to the Government to grant the company a "rescue loan", on the short term, for the implementation of a restructuring plan, and a medium-term loan, in the form of a state aid, for the modernization of the commercial fleet. The measures could have a financial result of USD 30 mln annually, according to the document consulted by Profit.ro.
The rescue aid will consist in granting a loan from the Treasury, in the amount of RON 195 mln (EUR 40 mln), "without which, Tarom would be unable to finance its current activity as of March", the head of the Prime minister’s Chancellery, Ionel Danca, announced after the Government meeting on Thursday. He specified that the rescue aid will be transformed into a restructuring aid, if the European Commission approves it. After the approval of the rescue aid, the company must come up with a restructuring plan.
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