SEPI will keep Air Europa’s current corporate structure intact

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The company retains the ‘holding’ and the two subsidiaries, whose councils will include two representatives of the State

The Sociedad Estatal de Participaciones Industriales (SEPI) will maintain the current corporate structure of Air Europa, which is made up of a holding (Air Europa Holding SL) from which two subsidiaries hang: Air Europa, the main airline, and Aeronova, which operates the low-cost brand Air Europa Express. In this way, the current corporate scheme of the Hidalgo family airline is preserved intact and the SEPI does not impose any change or division in the firm in exchange for the rescue, they reported in sources of the negotiation.

As announced days ago by the Minister of Economic Affairs and Digital Transformation, Nadia Calviño, the SEPI will appoint two of the five representatives in each of the three companies. The main question now is whether the Government will agree to Javier Hidalgo being the top executive or whether it will enforce the bailout to appoint a manager to pilot the recovery of the company and guarantee that public aid is returned.

On November 3, the Council of Ministers approved the rescue of Air Europa with the injection of 475 million euros of public money on account of the new solvency fund aimed at supporting strategic companies that have been impacted by the pandemic of the covid-19. The operation will be carried out by granting a participative loan of 240 million euros and another ordinary of 235 million, two instruments included in the regulation of the fund endorsed by Brussels.

Like the rest of the companies that benefit from this temporary public support, Air Europa will have six months to execute the two loans and a maximum period of six years to fully repay the amount it receives. Air Europa has already obtained in full confinement a loan of 140 million euros guaranteed by the Official Credit Institute (ICO), so its debt with the State after the rescue will reach 600 million euros.

Meanwhile, it remains unclear whether Iberia will finally go ahead with the agreed purchase of the airline. In this case, the negotiation is three-way, since in addition to agreeing a notable reduction with Air Europa of the 1,000 million agreed for the purchase in November 2019, the IAG airline must reach an agreement with the SEPI on the return of the aid received by Air Europa in case it finally took control.

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