The pandemic has blocked one of the largest operations in the Spanish air sector. Iberia’s purchase of Air Europa from the Globalia group continues because “the strategic value still makes sense”, but the airline of the IAG group will wait for the government to close the rescue of Air Europa to renegotiate the price.
“We are waiting to see the package that the Government will put in Air Europa”, according to Luis Gallego, current CEO of IAG and former president of Iberia, during a telephone press conference with journalists on the occasion of the presentation of third quarter results.
“To carry out the operation, it will be necessary to look again at the debt conditions that Air Europa has left and negotiate the price because it is not buying the same thing,” said Gallego, who recalled that before this was a healthy company and now “it will have about 600 million of debt”, counting the 425 million that, it is assumed, the Government will inject through the rescue fund for companies in distress managed by the State Society for Industrial Participations (SEPI) and the 140 million ICO credit.
This rescue will be, therefore, what unblocks the operation, or at least the renegotiation of the terms of the agreement. IAG planned to close it at the end of this year, but it will be delayed, pending this millionaire injection, until the first quarter of 2021, as detailed by the executive this Friday.
The price agreed at the beginning was 1,000 million euros. The operation was announced just a year ago and was pending approval by Competition. But then the pandemic broke out and now Air Europa, touched by the crisis, like the rest of the airlines, awaits rescue to avoid bankruptcy. Globalia had asked the Government for 425 million euros from the aid fund for strategic companies managed by Sepi.
According to Gallego, if an agreement is not reached “Spain will have lost the opportunity for the Madrid hub (Madrid-Barajas airport) to compete with the big Europeans where we have seen that governments support to its flag companies “.
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