Finnair has fully repaid the 400-million-euro capital loan it received from the State of Finland. This loan was initially granted as a lifeline during the turbulent times of the COVID-19 pandemic in March 2021.
Initially structured as a hybrid loan, the financial instrument underwent a transformation in April 2022, when it was converted into a capital loan, regarded as an equity instrument. This strategic conversion, along with the initial loan agreement, received the green light from the EU Commission’s competition authority, adhering to the European Union’s state aid rules.
Finnair had fully utilized the loan, drawing down the entire 400 million euros in 2022. The company demonstrated its robust financial management by participating in a rights offering of 570 million euros in November 2023. The State of Finland, supporting its national carrier, subscribed to its proportionate share of the new shares, using this subscription to offset 318.6 million euros of the principal amount of the capital loan.
Finnair repaid the remaining 81.4 million euros, along with related interest and fees amounting to 48.9 million euros, clearing all dues to the State of Finland.
Impact of Timely Repayment
Had Finnair not settled this debt, the company would have faced an additional burden of approximately 52 million euros in interest and other fees in 2024. This timely repayment has not only saved the airline from extra charges but also solidified its financial base.
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Finnair’s Debt-Free Future
With the complete repayment of both the capital loan and the earlier hybrid bond, Finnair now stands without any loans classified as equity capital. This move signals a strong financial recovery and positions the airline for future growth and stability.
