The government agreed on October 15 to support Nordica’s share capital by EUR 22 million and provide a loan of EUR 8 million to the struggling airline. Minister of Economic Affairs Taavi Aas said the government planned to approve the allocation of funds within a week.
The government received permission from the European Commission to support Nordica to the amount of EUR 30 million in August. The purpose of the state aid is to help cope with the difficulties caused by the coronavirus.
“As a result of the discussion in the Cabinet today, the specifications will be clarified and I very much hope that an additional session of the government will take place this week, where the allocation of funds will be decided,” Aas (Center) said at a press conference on October 15.
According to the government’s agenda, the government had to authorize Aas to increase the share capital of AS Nordic Aviation Group by EUR 22 million after acquiring a preliminary agreement with Polskie Linie Lotnicze (LOT) to acquire a 49% stake in Regional Jet OU.
Following the decision, Nordica and Kredex will negotiate a loan agreement. The state plans to provide EUR 8 million in the form of a loan.
One of the conditions for granting state aid to Nordica is that the state must leave the company or recover the aid from the company within seven years. The Ministry of Economic Affairs and Communications (MEAC) does not currently have a plan to privatize Nordica. (ERR/Business World Magazine)