The State of Finland and Finnair are preparing to make up to 400 million euros available to Finnair in the form of an unsecured hybrid loan. The final decision on the possible financing arrangement is subject to a decision by the Government Plenary session, which will also confirm the final terms and conditions of the loan. The hybrid loan requires approval by the EU Commission.
Finnair’s equity as of the end of the third quarter 2020 was 940 million euros and cash reserves were 725 million euros.
The facility will be structured so that Finnair is able to access the funds, if its cash or equity position would drop below the limits to be defined in the facility’s terms and conditions.
“Finnair is preparing for 2021 with a range of scenarios regarding the rebuild of our network. This facility will help to ensure that we can get through the pandemic period regardless of which scenario realizes. We entered the COVID-19 pandemic with a strong balance sheet and cash position. Now we want to ensure that we get through this exceptional time and can continue to implement our strategy of connecting Asia and Europe, and develop Finnair as a modern premium airline”, says Topi Manner, Finnair’s CEO.
”The hybrid loan would be an important facet in ensuring our financial stability if the recovery in air traffic is slower than expected”, Manner says. “We have during 2020 implemented several financing arrangements in order to bolster our finances and enable a cost-efficient cost structure, and we plan to continue these measures.”