Romanian private airline Blue Air said in a statement on November 18 that it took immediate steps to invite the authority for state assets management (AAAS) to attend the general shareholder meeting and take over the 75% stake it is entitled to.

"We have insisted for the state to execute the guarantees [related to the EUR 60 mln rescue aid] for the past 13 months," the company's representatives - supposed to represent the company's owners - stressed.

The situation is not that straightforward, though - and the 75% stake in Blue Air looks somewhat like a hot potato the state is now en route to accept. That's because the net worth of Blue Air may be well in the negative area at this moment, meaning that the state is rather responsible for paying compensations to the airline's customers who lost their money than recovering the rescue loan.

Two years after it received the EUR 60 mln rescue loan from Eximbank in October 2020, Blue Air suspended flights and chances to resume operations are small.

Indeed, AAAS, quoted by CursDeGuvernare.ro, announced on November 17 that it would become Blue Air's majority shareholder upon the Ministry of Finance's decision to execute the guarantees provided by Blue Air in relation to the rescue loan. However, the Finance Ministry stressed that only the state-owned bank Eximbank is entitled to execute the guarantees, Mediafax reported.

On a very cautious note, the ministry said it "asked Eximbank to evaluate the option of enforcing the provisions included in the letter of guarantee." The details of the letter of guarantee and the decision to "enforce the provisions" may become critical in front of the prosecutors investigating those responsible for the losses incurred by the state from this entire operation.

The loan was extended during the cabinet of former prime minister Ludovic Orban (National Liberal Party) during the term of minister of transport Lucian Bode (PNL). At that time, finance minister Florin Citu took several days off, and the document was signed by one of his subordinates, Save Romania Union (USR) MP Catalin Drula (who served as minister of transport for a short time in 2021) said in September 2022, according to G4media.ro.

Drula also explained that the Social Democrat (PSD) minister of transport, Sorin Grindeanu, convinced the PSD MPs in May 2022 to amend the emergency ordinance regulating the EUR 60 mln loan such as to make AAAS rather than the Ministry of Transport the recipient of the 50% stake in Blue Air in the event the provisions of the letter of guarantees are enforced. Essentially, Drula claimed that Grindeanu knew that Blue Air would collapse - but let the company sell tickets for another four months.

Blue Air's debts soared to EUR 230 mln in September 2022 from EUR 120 mln (including the EUR 60 mln rescue loan) in the summer of 2021, former minister Drula said.

andrei@romania-insider.com

(Photo source: Anton Volynets/Dreamstime.com)