Romania’s government is set to take a 75% controlling stake in grounded low-cost carrier Blue Air after opting to enforce a guarantee related to owed state aid granted during the pandemic.

Blue Air was forced to suspend flights on 6 September after Bucharest blocked its bank accounts over the recovery of millions of dollars’ worth of debt. While initially hoping to restart flights in October, Blue Air later said it was unable to do so and flights remain suspended indefinitely.

Blue Air Boeing 737 Max

Source: Blue Air

Blue Air continues to work on a finanical restructuring

Now the Romanian finance ministry has begun proceedings through the country’s Authority for Administration of State Assets (AAAS) to enforce the guarantee related to the granting of state aid to Blue Air in 2020. The state provided the letter of guarantee to Eximbank for 300 million lei ($63 million) of credit to Blue Air backed by a 75% stake in the company.

“We have initiated the procedure by which we will become the majority shareholder of Blue Air,”  AAAS president Florian Daniel Geanta told Romanian daily Curs De Guvernare. ”Our intention is to get this company back on its feet, but we can do that only after we become an official shareholder in Blue Air and following a detailed analysis.”

Blue Air says that following notification from the finance ministry, it has asked the AAAS to attend an AGM to fulfil the guarantee obligation and to hand over 75% of the shares.

”As soon as this legal process is completed, the company will publicly communicate the new shareholding structure,” the airline says. ”Obviously, later the majority shareholder of the company will decide the way of public communication of the Blue Air situation.”