Air Europa has officially announced the early repayment of its €475 million loan to the Spanish State-owned Industrial Holdings Corporation, known as Sepi. This significant financial move comes after the airline brokered a deal with Turkish Airlines, which invested €300 million in Air Europa.
Details of the Financial Arrangement
The agreement with Turkish Airlines involves a convertible bond that will be converted into a 26% equity stake in Air Europa, contingent upon the completion of regulatory requirements. This financial support will enable the airline to settle its loan obligations, which include both ordinary and participating loans with Sepi and accrued interest. The total repayment amounts to nearly €500 million.
Impact on Debt Management
With this repayment, Air Europa is also bringing forward the maturity date of its loans by one year. Last May, the airline had already repaid €141 million along with the associated interest on a bank loan from May 2020. This loan was supported by the Official Credit Institution (ICO).
- Loan Amount: €475 million
- Investment from Turkish Airlines: €300 million
- Equity Stake: Approximately 26%
- Total Repayment: Nearly €500 million
Air Europa characterized this repayment as a significant milestone in reducing its financial liabilities. The airline emphasized that this step reflects the effectiveness of its management strategy implemented in recent years.
Conclusion
The financial backing from Turkish Airlines marks a new chapter for Air Europa, allowing it to strengthen its financial position while enhancing its operational capability. This deal not only reduces debt but also aligns with Air Europa’s goals for sustainable growth and improved management.
