European Commission Greenlights €120m Greek Aid to AEGEAN

Photo source: AEGEAN

The European Commission has approved a 120-million-euro Greek aid measure to Aegean Airlines S.A. (AEGEAN) for damages suffered due to the coronavirus (Covid-19) pandemic.

Aegean Airlines is a Greek-based airline which suffered a significant reduction of its services, resulting in high operating losses.

The measure aims to compensate the airline for the losses directly caused by the travel restrictions imposed in the EU to contain the spread of the coronavirus over the March 23 to June 30 period.

The European Commission found that the Greek damage compensation measure is in line with EU State aid rules. It is conditioned upon the airline successfully effecting a private investor share capital increase of 60 million euros.

Additionally, the Greek state shall receive free warrants (without consideration), with a strike price equal to the price that investors shall be offered new shares upon the capital increase. Warrants will be exercisable any time during the period between 2 to 5 years after the disbursement of the support by the Greek state so as for it to benefit from any future upside in the share value of the company.

Warrants received by the Greek state would have rights for the acquisition of shares representing 11.5 percent of the company’s common shares post share capital increase.

Photo © GTP

The state support was agreed after taking into consideration the grave consequences caused by the Covid-19 pandemic to the airline sector as well as AEGEAN’s contribution to Greek tourism, overall economy and direct public revenues.

Aegean Airlines in 2019 transported some 15 million passengers. Before the coronavirus outbreak, Aegean operated flights from its main hub in Athens and from other Greek airports to 155 domestic and international destinations in 44 countries.

Following the European Commission’s approval of the Greek state aid, all necessary procedures are expected to be completed within the first three to four months of 2021.