Spain to weigh Air Europa stake in revised deal with IAG

Spain is considering taking a direct stake in Air Europa as part of a revised plan to rescue the troubled airline after the collapse of its proposed sale to IAG, according to people familiar with the matter. Under a new structure under discussion, state-backed coronavirus bailout loans could be converted into a government holding of about 40% in the carrier, according to the people, who asked not to be named while negotiations are in flux. IAG, the owner of British Airways and Spanish flag-carrier Iberia, would also likely acquire a stake, leaving the Hidalgo family, Air Europa’s current owners, with a small holding, the people said. The talks are ongoing and there’s no guarantee an agrement will be reached, they said. Representatives for Air Europa, which is owned by the Hidalgos’ Globalia Corp, declined to comment, as did a spokeswoman for IAG. Spain has guaranteed E475m in loans to Air Europa to keep it alive during the pandemic. About E240m are participatory loans convertible into equity. Nadia Calvino, Spain’s first deputy prime minister and economy minister, didn’t rule out such a conversion to protect the public interest. “At this stage, we are exploring all available options,” she said Friday. One consideration is whether any new proposal would withstand European Union antitrust scrutiny. The bloc’s competition chief, Margrethe Vestager, said in December that remedies offered by IAG in the aborted transaction weren’t enough to allay her concerns over the impact on the Spanish market. <br/>