State-owned Romanian carrier Tarom to receive EUR 12 mln aid for overdue debts
The Romanian government is preparing to allocate a portion of the restructuring aid for the state-owned carrier Tarom from the budget reserve fund.
The funds, nearly EUR 12 million, are needed for Tarom to pay overdue debts, which could destabilize the company's financial balance due to the accumulation of late payment penalties, according to the draft regulation reviewed by Profit.ro.
Following the European Commission's decision in April, the government approved the provision of individual state aid for restructuring to Tarom, up to RON 471.047 million (EUR 94.67 million), of which up to RON 226.825 million (EUR 45.59 million) is allocated from the state budget through the Ministry of Transport and Infrastructure's budget to increase the company’s share capital.
Tarom also benefits from state aid to cover damages caused by the COVID-19 pandemic in 2020, provided in the form of a state guarantee issued by the Ministry of Finance for a loan of RON 19.33 million, contracted for the period from 2021 to 2026 from Banca Transilvania.
The EUR 45.59 million can also be used to reduce the financing deficit needed in 2024 for the partial payment of overdue debts. So far, from the amount budgeted for 2024, RON 65.482 million (EUR 13 million) has been disbursed.
Last month, Tarom requested the allocation of a new tranche of the approved restructuring aid “to cover the financing deficit that does not allow it to pay overdue debts, which, due to the accumulation of late payment penalties, could destabilize the company's financial balance,” according to the cited source.
According to the government, Tarom's expenses covered from the government's reserve fund are urgent and are part of the restructuring plan approved by the European Commission.
Last month, the airline sold its slots at Heathrow Airport in London to Qatar Airways to raise new funds.
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