State prepares to participate in Finnair’s planned recapitalisation arrangements
Finnair Plc (“Finnair”) has announced that the company will begin preparing for a share issue as the losses caused by the COVID-19 situation have reduced the company’s equity. As a responsible owner, the State supports Finnair’s plan.
Due to the uncertainty of the market situation, the Ministerial Committee on Economic Policy has advocated that Parliament apply for a mandate of up to EUR 700 million to participate in Finnair’s recapitalisation arrangements, including the planned share issue and any other arrangements. According to the company’s plan, the total share issue would be estimated at EUR 500 million. The State of Finland currently accounts for 55.8 per cent of Finnair’s shares and votes.
“The effects of the COVID-19 crisis on air transport as a whole, and therefore also on Finnair, one of the strongest operators in the sector, have been earth-shattering. The State wishes to make sure in advance that it is prepared to support the solvency of the company adequately in different situations. Now more than ever, as a responsible, long-term owner, the State must make efforts to ensure that Finland also has a strong airline in the future,” says Minister Tytti Tuppurainen, who is responsible for ownership steering.
Finnair is a company of strategic interest to the State. International flight connections are essential for Finland, and the company plays a major role in the Finnish economy. For example, from the point of view of tourism, flight connections are vital. In recent years, the Finnish service and tourism industries have grown significantly as tourism has flourished in the country. Good connections are also central to the operating environment of the Finnish export industry, and domestic routes play a key role in ensuring regional accessibility.
The Ministerial Committee on Economic Policy has advocated that Parliament be given an extraordinary supplementary budget to cover the State’s participation in Finnair’s recapitalisation arrangements. At the General Meeting in May 2020, Finnair’s Board of Directors is set to propose a share issue authorisation in order to implement the arrangement.
Inquiries: Tino Aalto, Special Adviser, [email protected], +358 50 436 9188; Kimmo Viertola, Director General, [email protected], +358 29 516 0026; Minna Pajumaa, Senior Ministerial Adviser, [email protected], +358 29 516 0147
Requests for interviews with the Minister: Emilia Tervonen, Special Adviser, [email protected], +358 50 5520676