Romania’s Government approved a memorandum for granting a rescue aid worth RON 195 mln (EUR 40 mln) to the state airline Tarom, the head of the prime minister’s office, Ionel Dancă, confirmed on January 16, News.ro reported.

The aid will be provided in the form of a loan extended from the Treasury’s reserve that in principle must be returned.

However, the Government will ask for the European Commission’s approval to turn it into a grant, the official explained.

The company is facing insolvency  as it cannot finance current activity, Danca stated, explaining why the emergency loan was needed.

"This is a loan from the Treasury, in amount of RON 195 mln. Without this money, basically, Tarom would not be able to finance its current activity starting March," Danca stated before the Government meeting, when announcing the memorandum.

According to him, this is the first step - a rescue aid - that can turn into a restructuring aid, after notifying the European Commission and receiving approval in this regard. "Therefore, after approving the rescue aid, the company must come up with a restructuring plan," Dance stressed.

(Photo: Tarom Facebook Page)

editor@romania-insider.com