The air group IAGowner of the Iberia and Vueling airlines, estimates that 30% increase in value that has accumulated its participation in its now rival Air Europa since it formalized the taking of 20% of its capital in the form of a participatory loan. That credit, agreed in 2022 within the framework of its second attempt to absorb the Hidalgo airline, was then valued at 100 million euros.
Two years later, and despite the fact that this merger failed again, the value of that participationa fifth of the total, would have risen to 130 millionas recognized by the air group led by Luis Gallego in its June accounts. Therefore, the remaining 80% in the hands of Globalia would raise the airline’s valuation to around 650 million euros.
Are 150 million more than that received by Air Europa at the end of 2022when its then CEO, Javier Hidalgo, and his counterpart at IAG, Luis Gallego, agreed to the sale in exchange for 500 million euros. This amount was just half that of the 1 billion of euros in which the company was valued in November 2019, when both closed a first acquisition attempt by the Iberia parent company.
In between, The pandemic sank Air Europa’s accountslosing 732.1 million in two years (427.7 million in 2020 and 304.4 million in 2021) and raising its debt to the threshold of 1,000 million. To save their situation, the Hidalgo family turned to the Government and asked for a rescue of 475 million which was granted by the SEPI and another loan of 141 million that the ICO provided.
However, the financial and operational recovery registered by Air Europa in recent months has allowed its value to rise substantially. It closed 2023 with 18% more revenue and a historical profit of 165 million; a figure that for the current year should reach a range of 180 to 200 millionaccording to its directors.
In addition, it has already returned 124 of the 141 million lent by the ICO in 2020, waiting for it to begin returning the 475 million from the SEPI next year, so it will progressively reduce its leverage. Given that Air Europa does not disclose its accounts more than once a year, it is foreseeable that its business valuation grow again at the end of the current year.
Capital increase
These data are what IAG handles to decide whether or not to attend the capital increase launched by the corporation. Globalia to rebalance Air Europa’s accounts. IAG has until next Friday, December 13 to resort to this injection of funds and not dilute its current participation, from 20%, to around 17%. To do this, you must contribute the 16.25 million that corresponds to it, after the Hidalgos have contributed another 65 million, which would raise the total rebalancing of the company to a value of 81.25 million.
Luis Gallego, CEO of IAG, limited himself to expressing in the last press conference, held at the beginning of November that “We have not made a decision on this yet.“Today, spokespersons for the holding company Spanish-British people maintain the same discourse.
Recover 30 of the 125 million lost
The increase in the value of IAG’s stake by 30 million will allow it compensate part of the costs incurred by renouncing the purchase of Air Europa, when he paid 50 million to the Hidalgos as a penalty. Previously, for the first purchase attempt that was also ruled out, Gallego paid 40 million as break fee and another 35 for preferential purchase rights.
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