SEPI and the bank syndicate approve the 100 million loan from Iberia to Air Europa

IAG expects to convert the participating loan into up to 20% of the capital of the Hidalgo airline within six months

WASHINGTON, 2 Jun. (EUROPA PRESS) -

The president of Iberia, Javier Sánchez-Prieto, has indicated this Thursday that both the State Company for Industrial Participations (SEPI) and the bank syndicate have approved Iberia's loan to Air Europa for a value of 100 million euros, equivalent to 20% of the capital of the Globalia airline.

At a press conference in Washington, on the occasion of the launch of the route to this American city, Sánchez-Prieto reported that, after these approvals, in the coming days authorization will be requested from the UK competition authorities United Kingdom, Germany and Spain so that this loan becomes capital.

The director of Iberia has reiterated that the company continues with the strategy of trying to acquire Air Europa, but that it had to adopt this new strategy of buying 20% ​​"as a start to give continuity to the project".

It is estimated that the deadlines may be six months for the approval of competition and at least 18 months to complete 100% of the operation.

Sánchez-Prieto has underlined, however, that Iberia's commitment to convert Barajas airport into an international 'hub' continues in the event that the acquisition of 100% of Air Europa does not finally materialize.

Specifically, he has said that right now the dominant plan is to grow without Air Europa, since it is in his "hand", but that the incorporation of the Globalia airline would be an addition that he "seeks to add".

Last March, Iberia announced that it had agreed with the airline of the Hidalgo family an unsecured loan of 100 million euros for seven years, convertible for 20% of the capital.

According to IAG's statement to the National Securities Market Commission (CNMV), the agreement provided for a one-year period of exclusivity while talks are taking place and is accompanied by a right to match any third-party offer by the airline in the next three years, together with a right of exit with Globalia in case the latter decides to sell Air Europa at any time in the future.

"We remain convinced of the strategic importance of this operation for the development and competitiveness of the Madrid hub. Since we began negotiations, the world has changed. This agreement will give us time to exclusively evaluate alternative structures that may be of interest to both companies and that offer significant benefits for their customers, employees and shareholders”, Luis Gallego, CEO of IAG, said at the time.

It was the second agreement signed in recent months between the two companies. The last one was in December 2021, when the two companies agreed to terminate the agreement signed on November 4, 2019 and modified on January 20, 2021, according to which Iberia would acquire the Air Europa company. However, they agreed to reach an alternative to the merger, setting the deadline for the end of January 2022.

In October 2020, SEPI approved the bailout of Air Europa for 475 million euros, one of the largest authorized to date. The company must also return an ICO credit of 140 million in six years.