The Board of Directors of Romanian state-owned air carrier Tarom approved a memorandum asking for state aid, in the form of a grant of up to RON 924 million (EUR 191 mln), Bursa.ro reported.

The document has already reached the Government and was on the agenda of the meeting on November 5.

The grant would finance half of the five-year restructuring program, with the rest of the financing being provided by the company from its own sources. The restructuring program includes fleet renewal, commercial optimization, and attracting additional revenue, following the implementation of a strategy for the separation of ancillary services.

The state aid has to be notified to the European Commission for endorsement. So far, the Commission allowed the Government to extend state guarantees for less than EUR 20 mln worth of loans, needed by Tarom to cover the losses incurred during the lockdown period this spring - one-third of the EUR 60 mln proposed by the Government.

The company had previously benefited from a state aid amounting to approximately EUR 36.7 mln, granted in the form of a loan from the Treasury, before the coronavirus pandemic, which should have covered the company's liquidity needs for the period March-August 2020, ensuring the normal operation until the implementation of a restructuring program. However, the crisis caused by the COVID-19 pandemic complicated Tarom's financial situation, and the company used the EUR 36.7 mln for current expenditures.

iulian@romania-insider.com

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