Adds analyst feedback, no remark from corporations, share worth
Adds analyst feedback, no remark from corporations, share worth
MADRID, Dec 18 (Reuters) – British Airways and Iberia proprietor IAG ICAG.L has agreed to purchase Spain’s Air Europa for 500 million euros ($613 million) with cost deferred till 2026, web site El Confidencial reported.
IAG, its Spanish unit Iberia and Air Europa proprietor Globalia declined to touch upon Friday on the El Confidencial report, which cited unnamed sources saying that the deal was on Thursday at half the unique supply worth.
After initially agreeing to purchase Air Europa for 1 billion euros in November 2019, IAG however has been pushing to chop the value because the coronavirus pandemic threw the airline trade into disaster.
Worldwide journey restrictions have introduced the worldwide transport sector to a grinding halt, pushing a number of airways to depend on state support.
For the sale to proceed, the Spanish authorities should waive its proper to nominate two administrators to Air Europa’s board, one of many situations of a 475 million euro state support package deal authorized final month.
Spanish brokers JB Capital seen this potential new deal as largely optimistic because of the cost deferral.
“We noticed a possible money outflow for IAG within the following months as a much bigger danger for this transaction, given the present uncertainty within the aviation trade,” JB Capital mentioned.
El Confidencial mentioned the rationale for the deferral was to present Air Europa time to repay the state support package deal.
Spain’s state-owned industrial holding firm SEPI, which supplied the funds for Air Europa, declined to remark.
JB Capital additionally mentioned, nonetheless, that the potential settlement “could be seen negatively by the market” because the sum reportedly to be paid can be above 350 million to 400 million euros beforehand reported by the identical information outlet.
IAG shares have been down virtually 1% in London.
(Reporting by Nathan Allen and Jesús Aguado in Madrid; further reporting by Laurence Frost in London; Modifying by Andrei Khalip and Alexander Smith)
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