Are you sure?

Malév “rescue plan” goes to EU for approval

The government is to submit a “rescue plan” for Malév, which has already been largely drawn up, to the European Commission for approval, CEO of the National Asset Management Company (MVN) Miklós Kamarás told MTI late on Monday.

The state of Hungary reached an agreement late Friday to acquire a 95% stake in national carrier Malév through a HUF 25.2 billion capital raise, including cash and the conversion of debt. Former majority owner AirBridge retained a 5% stake.

Low-fare airline Wizz Air announced earlier on Monday that it considers the renationalization of Malév an illegal state subsidy and would turn to the European Commission on the matter.

Spokesperson for the Commission's competition commissioner Amelia Torres told MTI on Monday that the Commission had not yet received any information from the Hungarian government on its plans regarding Malév or any complaints on the matter.

Economy minister István Varga told Hungarian journalists in Brussels that “the government certainly decided wisely when it chose to rescue Malév and maintain its operation through the agreement reached late on Friday.” He added that he was confident the transaction would “stand the test.”

Kamarás told MTI that Russia's state-owned Vnesheconombank (VB) remains a direct owner through AirBridge. Under the agreement, VB is to convert loans of €30.4 million into equity in Malév within 10 days, reducing the Hungarian state's stake in Malév to 75% plus one vote.

VB will continue to lend to Malév at conditions outlined in a decree by the Hungarian government, issued in December 2009, that caps the interest on the loans at EURIBOR+500bp.

Kamarás said in an interview with public radio MR1 that state-owned Eximbank would immediately make credit available to Malév.

Fidesz, Hungary's main opposition party, said that if it forms the next government, it would start a review of Malév's renationalization. (MTI-ECONEWS)