In a filing with the Securities and Exchange Commission, IAG announced that it has reached an agreement with Globalia under which the holding company that owns Iberia and British Airways will grant Air Europa’s parent company an unsecured €100 million, seven-year loan.
The key to the deal: once the relevant regulatory approvals have been obtained, IAG will have the option to convert the loan into a stake of up to 20% in the capital of Air Europa.
Luis Gallego, CEO of IAG, said, «We remain convinced of the strategic importance of this transaction for the development and competitiveness of the Madrid hub. Since we started negotiations, the world has changed.»
«This agreement will give us time to exclusively evaluate alternative structures that may be in the interest of both companies and offer significant benefits for their customers, employees and shareholders,» he concluded.
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The agreement is conditioned to Globalia receiving the approval of the syndicated banks which provided the loan agreement partially guaranteed by the Instituto de Crédito Oficial (ICO) and the Sociedad Estatal de Participaciones Industriales (SEPI).
The agreement foresees an exclusivity period of one year while the talks are being carried out, and it is accompanied by a right to match any third party offer for the airline during the next three years, together with a right to exit together with Globalia if the latter decides to sell Air Europa at any time in the future.
