Spanish carrier Air Europa has repaid in advance a €475 million ($505 million) loan granted by Spain’s Strategic Companies Solvency Support Fund (FASEE), which is managed by state-owned holding company Sociedad Estatal de Participaciones Industriales (SEPI).
SEPI also said that the airline paid the corresponding interest on the EUR 1 billion loan.
According to the Spanish news agency EFE, this repayment takes place one year ahead of schedule and represents a new milestone in the repayment and recovery of the aid distributed by the state to strategic companies in Spain during the pandemic.
Early repayment boosts state recovery
According to the report, the SEPI stressed that early reimbursement of Air Europa demonstrates the functioning of the FASEE mechanism, created to preserve employment and the continuity of those companies that were most affected by the COVID-19 crisis.
Including this compensation, the total amount retrieved by the fund increases to €1,425 million, or 53% of the total disbursed through FASEE since it was established: €2,681.
The public fund was set up to provide companies deemed necessary to the national economy with temporary financial assistance.
According to SEPI, the mechanism has served its purpose, as it has helped prevent companies benefiting from the measure from stopping their activities and has helped recover employment levels.
SEPI says the firms that received temporary support have collectively grown their workforce by 26% compared to employment levels when the aid was awarded.
Alongside Air Europa, other firms which have completely repaid their loans were Ávoris, Eurodivisas, Wamos, Rugui Steel, Ferroatlántica, Soho, Hesperia and Hotusa.
Strategic partnership with Turkish Airlines
Air Europa’s early repayment corresponds with a significant strategic shift.
Earlier today, the airline announced the completion of an agreement with Turkish Airlines, which allows the Turkish carrier to buy a significant part of the Spanish company.
Turkish Airlines will invest €300 million in the transaction, which will be structured as a convertible loan and exchanged for an approximate 26% stake in Air Europa once regulatory permissions are finalised.
This transaction values Air Europa at approximately €1.175 billion and boosts its position in the European aviation industry.
The move is viewed as a step toward increasing commercial cooperation and improving connections between Europe and other locations.
The Hidalgo family, through its holding firm Globalia, will remain the largest stakeholder, while International Airlines Group (IAG) will keep its current position by purchasing shares from Globalia.
A positive signal for Spain’s economic support framework
The FASEE mechanism remains valid as an instrument for the stabilisation of sectors that are key sectors and the reactivation of sectors affected by the crisis due to the pandemic, SEPI underlined.
The successful repayment by Air Europa and other beneficiaries is a concrete step towards the government´s overall goal, which is to recover public funds and strengthen medium-term economic resilience.
Spain’s plan to protect strategic industries while balancing the budget seems to be paying off as the fund recovers its investments and employment gains momentum.
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