The European Commission has approved Finnish plans to contribute to the recapitalisation of Finnair through the subscription of new shares by the State in the rights issue launched by Finnair on 10 June 2020 in the context of the coronavirus outbreak.
Finnair plays a major role in the Finnish economy, notably because it ensures domestic and international air services for Finland that are essential to the recovery of the national economy after the coronavirus outbreak. With 55.8% of the shares, Finland is Finnair’s largest shareholder.
The total capital increase is expected to be of approximately €500 million. The State is expected to receive rights to subscribe for new shares in an amount of €286 million, corresponding to its current shareholding level. The remaining shares will be offered on the market, subject to pre-emptive subscription rights of other existing shareholders.
The Commission found that the Finnish measure is in line with Article 107(3)(b) TFEU, which enables the Commission to approve State aid measures to remedy a serious disturbance to the economy of a Member State, and the general principles set out in the Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020and 8 May 2020.
The Commission concluded that the recapitalisation measure will contribute to manage the economic impact of the coronavirus outbreak in Finland. It is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the general principles as set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: “Finnair ensures the essential domestic and international connectivity needs of Finland. Given the geographic location of the country, the national economy, many jobs and the development of foreign trade rely on these services.
The €286 million public contribution to Finnair’s recapitalisation will help the company in an industry that has been particularly hard hit by the coronavirus crisis. The substantial participation of market investors in the transaction is a positive signal that the Commission strongly encourages, as it limits the distortion of competition while contributing to the recovery of undertakings affected by the coronavirus outbreak.”
Arianna Podesta –