Romanian state-owned lender Eximbank disbursed the first tranche of roughly half of the RON 300 million (EUR 62 mln) state-guaranteed loan to private airline Blue Air, the company's CEO Oana Petrescu announced on October 26, Profit.ro reported.

On October 23, the Senate, as the first chamber to discuss the Government's ordinance for this state aid, erased the facility aimed at helping Blue Air from the document.

The terms for the first tranche's disbursement were rather strict, the company's CEO disclosed.

Thus, the company had to abandon a previous debt rescheduling agreement with the Government, reached in the summer.

It must use a large part of the money disbursed by Eximbank for paying its debt to the state budget and to other creditors that would have otherwise not been due.

At the same time, Blue Air will pay an interest rate of 4% per year to Eximbank plus a 2% fee to the Finance Ministry for the state guarantees received for the loan.

The company will also have to use its own assets and the assets of the investment vehicle that owns it as collateral.

Under the new circumstances, Blue Air must revise its recovery plan previously agreed with its creditors under a pre-insolvency procedure, said Oana Petrescu, who remained optimistic about the outlook.

"Although the demand is below 20% compared to the same period last year, we will continue to operate flights to the destinations most requested by our passengers. With this loan, we will also be able to start reimbursing the amounts due to passengers who have decided that they no longer want to travel in the next 24 months and who have already applied for a refund. We are glad that our passengers, for the most part, have decided to support us by using the electronic wallet to purchase Blue Air tickets or services in the next two years," she commented.

(Photo: Nikolay Bychov/ Dreamstime)

andrei@romania-insider.com