thanks to its 20% stake in the Globalia airline
LE | Miami | August 2, 2024
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RELATED TOPICS: Air Europa, Air France-KLM, Globalia, IAG, Iberia, Lisbon, Lufthansa, Madrid, Miami, New York, TAP
Iberia, after giving up on the purchase of Air Europa as it announced in a world premiere Preferential Seven hours before the IAG airline confirmed it, it has the option of recovering the amount spent on the operation thanks to the 20% it holds in the Globalia company.
Iberia has paid 225 million euros (almost 243 million dollars) to the Hidalgo family, including 125 million euros in penalties and the 100 million euros paid for a fifth of its capital (Avianca breaks with Volotea after Iberia failed to absorb Air Europa).
He break-fee —The initial break-up fee was 40 million euros, but IAG paid 75 million to the owners of Globalia for an additional premium of 35 million to have a preferential purchase option (Iberia informs Air Europa creditors that it will renounce its purchase).
Pepe Hidalgo was then negotiating the sale to Avolon, an English fund linked to Air France-KLM, and now the owner of Iberia announced that it would dedicate another 50 million as compensation for giving up its purchase attempt after almost five years of having announced it.
Iberia also agreed to pay 100 million in advance as a loan convertible into shares to buy 20% of Air Europa, a stake with which it could recover part of its investment if a buyer such as Air France-KLM or Lufthansa acquired Air Europa at a higher price than IAG was going to pay.
The presence of the Spanish State through SEPI as the airline’s main creditor makes bankruptcy difficult but increases the chances of some kind of nationalization in a more adverse scenario, since the airline Globalia still has a financial deficit of almost 500 million euros (Air Europa: the two sides of the coin for surviving without Iberia are its 787s).
Globalia, faced with banks refusing to provide it with more loans in the midst of the pandemic, only received public funds from the Sociedad Estatal de Participaciones Industriales (SEPI) up to an amount of 475 million euros, of which 240 million were in the form of participation and it is expected that this conversion of debt into capital will occur at some point.
IAG may also accelerate its offensive for the Portuguese state-owned TAP with a dual hub between Madrid and Lisbon, after the purchase of ITA (formerly Alitalia) by the German Lufthansa has just been approved in Europe, as it has been revealing. REPORTUR.us (Iberia owner seeks with TAP a “dual hub” between Madrid and Lisbon).
In any case, Iberia announced on Thursday that it will maintain its 20 percent stake in Air Europa, as it currently lacks a realistic buyer for this stake.
