Croatia Airlines recapitalised
Croatia Airlines has announced it has completed its recapitalisation process valued at 46.2 million euros. The Croatian carrier issued 35 million new shares which have been acquired by the state in order to “return the airline’s capital to pre-Covid levels i.e. to the same levels as on December 31, 2019”, the company said. It added, “This is one of the applicable financial support mechanisms Croatia has adopted based on the European Commission’s temporary framework for state aid measures to support the economy in the current Covid-19 outbreak”. The Croatian government already holds a 99% stake in the national airline.
The company now has registered capital amounting to 82.6 million euros. In addition to the capital increase, the government had previously also provided 33.2 million euros to the carrier as an equity loan and 11.7 million euros as direct aid, which has been approved by the European Commission. “The aid will secure the continuity of the airline’s business during and after the pandemic”, the Croatian government said. Croatia Airlines has so far introduced a number of measures to bring down costs and plans to maintain them in the coming months. “Until further notice, we are continuing to rationalise our business in all segments. We have undertaken rigorous cost saving with the aim to safeguard our liquidity and preserve jobs”, it said.
Commenting on the year ahead, Croatia Airlines noted, “We will continuously harmonise our business activities during 2021 based on the existing epidemiological situation at the given time. In line with announcements and the gradual normalisation of the health crisis, as well as the expected lifting of travel restrictions, we stand ready to gradually increase capacity and flight operations on routes that we were forced to reduce in 2020. The normalisation of passenger flow and the return of confidence in air travel will be key to restoring market demand, which will dictate the business rhythm for the entire aviation sector, including Croatia Airlines”, it said.
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