“By 2022, Blue Air would have solved its liquidity problems caused by the continuation of the pandemic, and the Blue Air group (i.e. renamed Ridgecrest Ltd) could complete its listing on the London Stock Exchange,” says Oana Patrescu, former CEO. Blue Air, whose mandate expired in February 2022.

According to Oana Petrescu, the list was to be made in the Alternative Investments (“AIM”) section, continuing the process of expansion in Southern Europe and connecting regions with a significant Romanian diaspora both to Romania and to the main European air hubs (Heathrow, Charles de Gaulle, Amsterdam)

Memorandum sent by Blue Air to the Ministry of Transport and Finance on July 16, 2021 and updated on August 18, 2021) does not require additional assistance, but only change in the form of state aid already received: from a letter of guarantee for a loan from Eximbank in direct participation in the capital of Blue Air – in this way, the Romanian state becomes a shareholder, explains the former CEO of Blue Air.

Thus, the company would have freedom of action to attract additional capital from the foreign market – without the obligation to pledge 75% of the newly issued shares, as stipulated in the Guarantee Agreement signed with the Ministry of Finance on October 22, 2020. (a provision that makes any approach to raising capital unworkable).

On the other hand, for the Romanian state, entering the share package of Blue Air would increase the chances of returning the state aid, the company even proposed the issue of preferred shares with a priority dividend and/or the purchase of the corresponding shares with a premium for a maximum of 5 years, Oana Petrescu believes.

It was obvious to us that we would face liquidity problems in autumn 2021, so we started negotiations with all key creditors

In the second half of August 2021, all European aviation faced the third wave of the pandemic, which caused a significant reduction in air traffic – much more than the usual reduction in the autumn and winter season. Given the fact that the company has a very well-calibrated treasury management system, it was obvious to us that we would face liquidity problems in the fall of 2021, so we started negotiations with all major creditors (including Eximbank) to write off overdue debt. on time – so that we do not create problems for them and do not endanger the preventive agreement, – Petrescu also says

The former general director of the company also recalls what measures were taken in the absence of funding: a significant reduction in the number of flights and aircraft, a reduction in the number of bases, a change in staff, a review of payment terms with all the company’s creditors, including relevant authorities. Unfortunately, all these measures, although necessary for survival, inevitably led to a decrease in the value and sustainability of the company.

“All these decisions were taken to preserve and protect the company’s main assets: the network of routes and destinations, the passengers who chose to continue flying with us despite all the difficulties we faced, the people of Blue Air and the know-how of their instructions, the new Boeing 737-8 Max aircraft and future aircraft orders. All this was created in-house, thanks to the perseverance of people from the Blue Air team, and it would be a shame to lose them,” says Oana Petrescu.

In that Memorandum, I repeat, we did not ask for 54 million from the state, but the conversion of debt into capital – so that we could finance our singer from the foreign market. However, at the request of the then representative of the MF in Blue Air CĂ, I added an additional scenario in which I showed the fact that in the event that the Romanian state did not want to reduce its participation in the capital of Blue Air through the increase of capital from external sources, of course , he had the opportunity to independently support a company that would become more state-owned, supplementing state aid in whatever form he saw fit, Petrescu concludes.