Preparations are being made for talks with Hungary’s Russian partners on putting the situation of national carrier Malev in order, Attila Marton, government commissioner in charge of air travel, said on Wednesday.
The topic is expected to be put on the agenda of the next meeting of the Hungarian-Russian intergovernment economic committee, Mr Marton said.
Malev’s current structure is unsustainable, Mr Marton said, adding that the room for financial manoeuvre for the airline and the government is still a question. Malev and the government are constrained, and what can be done will depend on ongoing talks with Vnesheconombank, Mr Marton said.
Hungary’s National Asset Management Company (MNV) has called an extraordinary general meeting of Malev for Friday, July 23, Econews reported on Tuesday. The chairman of the board of directors is to be replaced at the meeting.
Malev was renationalised in February through a HUF 25.4bn capital raise by the state, including HUF 20.7bn in cash and HUF 4.7bn in converted debt. The state acquired a 95pc stake in the airline and former majority owner AirBridge kept 5pc. Russia’s state-owned Vnesheconombank (VEB) – Malev owes the bank about EUR 134m – owns 49pc of AirBridge.
There were already problems with the airline’s privatisation contract, Mr Marton said. This requires further review, but will be the task of government commissioner Ferenc Papcsak, he added.
The state assets manager did “not prescribe that the buyer give capital” to Malev when the capital-poor airline was sold, Mr Papcsak said. The buyer, AirBridge, should have assumed EUR 90m in loans, but it only signed a EUR 32m bank guarantee, he added.
Answering a question by MTI, Mr Marton said a guarantee by Eximbank under a government decree issued in February was for a loan of about EUR 13.2m from the European Investment Bank (EIB).
Mr Marton declined to reveal the current size of Malev’s debts when asked by a journalist, but he did say that agreements on the debts have been reached with practically every lender.
Asked about further financing for Malev, Mr Marton said the matter had to be dealt with cautiously as Malev’s competitors had already contested the financing with the EU.