IAG acquires 20% of Air Europa after converting a loan

The IAG group, owner of Iberia, British Airways or Vueling, has acquired 20% of Air Europa after exercising its option to exchange a convertible loan made to Globalia, its parent company, for a stake equivalent to that percentage, according to a statement sent this Tuesday to the National Securities Market Commission (CNMV).

NewsEditor
NewsEditor
16 August 2022 Tuesday 02:47
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IAG acquires 20% of Air Europa after converting a loan

The IAG group, owner of Iberia, British Airways or Vueling, has acquired 20% of Air Europa after exercising its option to exchange a convertible loan made to Globalia, its parent company, for a stake equivalent to that percentage, according to a statement sent this Tuesday to the National Securities Market Commission (CNMV).

On March 17, IAG announced that it had granted a convertible loan to Globalia, of the Hidalgo family, for 100 million euros over a period of seven years. The loan included a one-year exclusive negotiation commitment, which prevented the Hidalgos from seeking alternative buyers. IAG stated in June, when the loan was formalized, that its intention was to acquire 100% of the company.

Likewise, the operation is accompanied by a right to match any third-party offer by the airline in the next three years, together with an exit right with Globalia in the event that it decides to sell Air Europa at any time in the future.

The purchase would make it possible to strengthen the Madrid hub and the group's connections with the South Atlantic region. The recovery of air traffic allowed IAG to return to profit territory between April and June, when it earned 133 million euros. In the first semester, in any case, it still carries losses of 654 million euros, below the 2,048 million of the previous year.

The recovery of IAG's business is largely due to the pull of Iberia and Vueling and, in particular, to the good performance of demand in the Spanish and Latin American markets. For its part, the activity of Air Europa has been recovering more weakly, after being rescued with 475 million euros from the solvency support fund for companies affected by the covid crisis managed by SEPI.

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