Finnair announced in its Stock Exchange Release on 20 May 2020 that the Finnish Government has approved that the State of Finland guarantees Finnair’s pension premium loan up to 540 million euros. With the state guarantee and the following pension premium loan, Finnair aimed to further secure its cash position and business continuity also after the exceptional situation caused by the corona crisis. Further, a commercial bank guaranteed up to 60 million euros of the loan. The arrangement was compliant with the EU state aid regulations and was approved by the European Commission on 18 May 2020.
Finnair drew down the 600-million-euro pension premium loan in three tranches in 2020 and based on the agreed schedule, the loan was planned to be repaid in two 300-million-euro tranches in December 2022 and in June 2023.
The EU Commission’s competition authority approved the extension of the 540-million-euro guarantee related to the pension premium loan on 20 June 2022. To maintain its cash funds in the prevailing uncertain operating environment, the company has agreed with other parties to extend the guarantees and the loan. The loan maturity is extended until 2025 and the repayment schedule is amended so that the company will amortise the loan by 100 million euros every 6 months. However, the remaining two 100-million-euro tranches will be paid in full on 15 May 2025. As opposed to the previous schedule, the loan will not be amortised in December 2022.