At a press conference held yesterday (June 2nd) in Washington D.C. on the launch of Iberia new route to the city, the airline’s President Javier Sánchez-Prieto informed that Spanish Sociedad Estatal de Participaciones Industriales (SEPI) and the banking syndicate approved the company’s loan to Air Europa, for a total amount of 100 million euros.
According to what was informed, in the next few days the corresponding authorization will be requested to the competent authorities in Spain, Germany and the United Kingdom (corporate headquarters of IAG holding, which owns Iberia). Once this process is completed, the loan would be converted into capital.
It is estimated that competition approval could take around six months, while the final closing of the transaction would take no less than eighteen months.
Last March, IAG informed Spain’s Comisión Nacional del Mercado de Valores (CNMV) that it had reached an agreement with the Globalia Group, owner of Air Europa. The document detailed the willingness to grant an unsecured loan with a term of seven years.
Subject to regulatory approvals, IAG would have the option to convert the loan into a stake of up to 20% in the capital of Air Europa. The loan was conditioned to Globalia’s receiving the approval of the syndicated banks, which provided the contract partially guaranteed by the Instituto de Crédito Oficial (ICO) and the Sociedad Estatal de Participaciones Industriales (SEPI).
With the approval, Mr. Sánchez-Prieto reiterated that Iberia still intends to acquire the second largest Spanish airline. Buying 20% of the company is «a start for giving continuity to the project», according to the executive. However, he also reaffirmed his commitment to growth, regardless of what happens between the two companies.
See also: IAG bids again for Air Europa: A loan that looks a lot like a buyout
