The European Commission has approved Latvian government plans to grant up to €39.7m (US$47m) for the recapitalization of the state-owned parent company of Riga International Airport. The measures were approved under the EU’s state aid temporary framework.
The European Commission’s executive vice-president, Margrethe Vestager, who is in charge of competition policy, said, “Airports are among the companies that have been hit particularly hard by the coronavirus outbreak. With this measure, Latvia will contribute up to €39.7m to reinforce Riga International Airport’s equity and support the company face the economic effects of the outbreak.
“At the same time, the state aid will come with strings attached to limit undue distortions of competition. We continue working closely with member states to ensure that national support measures can be put in place in a coordinated and effective way, in line with EU rules.”
Riga International Airport is fully owned by the Latvian state and has suffered substantial losses due to the coronavirus outbreak; the financial situation of the company continues to deteriorate. As a result, the airport says it currently risks not being able to maintain its viability. The Latvian government notified the Commission, under the temporary framework, and instigated recapitalization measures comprising a €35.2m (US$41.8m) capital injection and a €4.5m (US$5.3m) waived dividend payment for the 2019 financial year.
The Commission concluded that the recapitalization measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state. It therefore allowed for the improvement of the financial position and liquidity of the airport, while maintaining the necessary safeguards to limit competition distortions.