Helsinki prepares €400mn loan for Finnair

Finland is assembling an unsecured hybrid loan of up to EUR400 million euros (USD487 million) to assist Finnair (AY, Helsinki Vantaa), the 55.9% state-owned flag carrier announced in a stock exchange filing on December 16. A final decision on the possible measure depends on the outcome of a government plenary session, which will also confirm the loan’s terms and conditions. The hybrid loan also needs the approval of the European Commission. The facility would be structured so that Finnair is able to access the funds if its cash or equity position drops below limits that will be defined in the terms and conditions. The company’s equity as of the end of the third quarter was EUR940 million euros (USD1.15 billion), while its cash reserves were EUR725 million (USD884 million). “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 realises,” Topi Manner, Finnair’s CEO, outlined in the statement. “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 continue to implement our strategy of connecting Asia and Europe and develop Finnair as a modern premium airline.” He added: “The hybrid loan would be an important facet in ensuring our financial stability if the recovery in air traffic is slower than expected. 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.” Finnair also announced, in an earlier statement, a separate funding measure in which the export credit agencies of Germany, France, and the United Kingdom provided it with support in excess of EUR100 million (USD122 million). Such credit support has been offered to purchasers of Airbus aircraft and, in this case, it was granted for an A350-900 that was delivered to Finnair in September. Finnair has ordered a total of nineteen A350-900s from Airbus, of which sixteen have so far been delivered, according to the ch-aviation fleets advanced module.