Serbia buys out a portion of Air Serbia shares from the Arabs

Photo: Tanjug/Dragan Kujundzic

Based on an agreement between the Ministry of Economy of the Government of the Republic of Serbia and Air Serbia, the Serbian national airline has undergone recapitalization, with the Republic of Serbia increasing its ownership stake in Air Serbia from 51 to 82 percent, while Etihad Airways' share as been reduced from 49 to 18 percent.

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The increase of the base capital of the company was done in order to eliminate the disturbances in the economy caused by the Covid 19 pandemic.

The Government of Serbia said on many previous occassions that it will not allow the collapse of the national carrier, and that it will buy out its share if necessary.

"We are grateful to the Government of the Republic of Serbia for providing support to the national airline to overcome the business obstacles caused by the coronavirus pandemic in the most difficult year in the history of passenger air traffic," said Air Serbia CEO Duncan Naysmith. He added that, "in this way, the foundations for further uninterrupted business activities have been created and, with fundamental measures to streamline the company's operations, which are already well under way, Air Serbia will be able to overcome the difficulties, strengthen its position as a regional leader and continue to provide direct and an indirect contribution to the Serbian economy, primarily in transport and tourism. "

The recapitalization of the Serbian national airline was undertaken at the request of Air Serbia, in accordance with a decree of the Government of the Republic of Serbia dated October 2020, which envisages the measure of recapitalization of economic entities affected by the pandemic. This decree is fully in line with the European Commission's Provisional Legal Framework, which regulates state aid measures in support of the economy during the current Covid pandemic, including recapitalization.

At the request of the Government of Serbia, the Commission for State Aid Control reviewed the proposed measures and confirmed that the measure of increasing the capital share in the company was harmonized with Serbia's positive legal regulations, which created the conditions for the recapitalization.

(Telegraf Biznis)