EU orders Hungary's flag carrier Malev to pay back illegal state aid.

By bne IntelliNews January 10, 2012
The European Commission (EC) ruled that Hungary broke the state-aid law when it provided financing to national carrier Malev in the 2007-2010 period and ordered the troubled airline to repay the aid. According to the EC, Malev would not have been able to secure such financing from the market on the terms conceded by the Hungarian authorities, the EC said in a statement. The state aid to Malev includes a EUR 76mn loan received in December 2007, a HUF 4.3bn (EUR 13.7mn) cash facility in the context of the abortive sale of Malev's Ground Handling, HUF 13.8bn tax allowances, two capital increases in total of HUF 31.1bn, shareholder loans granted in May-Sep 2010 totalling HUF 14.9bn as well as conversion of part of these shareholder loans into Malev's shares. Malev has four months to repay the illegal state aid, MTI news agency cited later a statement of the EC. Hungary's development ministry said it accepted the EC decision adding that further steps and the future of the troubled incumbent carrier will be discussed by the government at a meeting on January 16. Development minister Tamas Fellegi said in December 2011 that Hungary was in talks with several investors on the establishment of a new incumbent air carrier. The shareholders' agreement might be signed in the spring of 2012.
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