Air Serbia (JU, Belgrade) managed to repay a USD57.6 million loan from Etihad Airways special purpose vehicle EA Partners I before it matured on September 28, it announced in a statement on September 29.
In August, Etihad bondholders rejected an Air Serbia proposal to revise loan amounts and repayment deadlines for two bonds due in September 2020 and June 2021. Etihad Aviation Group had arranged the two secured bonds in September 2015 and May 2016 to finance airlines and other businesses it had stakes in.
The Serbian flag carrier accepted the second loan, for USD63 million, from EA Partners II on May 20, 2016, which remains outstanding.
The Abu Dhabi airline holds a 49% stake in Air Serbia, while the Serbian government controls the rest. The funding vehicles are comprised largely of international investment funds.
“The Serbian national airline expresses great satisfaction with the fact that it managed to provide the funds for the payment of liabilities independently, thanks to responsible business before the coronavirus pandemic as well as extensive austerity measures at all levels,” the statement said.
“Air Serbia will continue having active talks with its strategic partners, including creditors and strategic suppliers, in good faith that a solution acceptable to all can be reached through negotiations,” it added.
CEO Duncan Naysmith pledged: “During the suspension of commercial passenger traffic, Air Serbia started a series of programmes aimed at working with business partners, implementing austerity measures and maintaining liquidity, as well as improving business processes and services for our passengers. All these programmes will continue to be delivered.”
The week before Air Serbia announced the debt repayment, the Serbian government assured that after it completes talks with partners the airline will receive state aid to cover recent losses. Transport minister Zorana Mihajlović told the Prva Srpska television channel that the government had not yet approved aid but would certainly do so.
“No financial aid has been allocated to Air Serbia. We are waiting for them to talk to their partners first, but there is no doubt that the state will help,” she said.
