TACV DELAYS PAYMENT OF LOANS OF ALMOST 210 MILLION ESCUS

Cape Verdean state-owned airline TACV asked for a one-year extension of the payment period for two loans, citing the impact of rising fuel prices.

According to a resolution by the Council of Ministers published today, consulted by Lusa, at stake are loans contracted by Transportes Aéreos de Cabo Verde (TACV) from Caixa Económica de Cabo Verde, in the amount of 100 million escudos and more than 110 million escudos, both with guarantees from the State and which have now been extended for 12 months, by decision of the Government.

“With the recovery of the economy and its activities, TACV presented a 2022/2023 recovery and stabilization plan, through which the basic assumptions were defined for the purposes of stabilizing the company's operations and financial situation. However, the execution of this plan also faced new challenges, as a result of the rise in fuel prices by around 80% between January and June 2022, as a result of the war in Ukraine”, reads in the same resolution, which approves the extension of State endorsement.

“This scenario had an impact on the expected profitability of the flights, as well as the company's cash flows, so, in order to ensure better management of its treasury in this process of resuming its activities, which involves investments to implement the sustainability plan, TACV requested an extension of the payment period for two loans contracted with Caixa Económica de Cabo Verde”, he adds.

Given the “relevance of the company to the national economy, and more specifically in terms of the air transport sector and the country’s connectivity with the world”, the State, as the majority shareholder, “recognizes the manifest importance of supporting the company with the extension of these two credit guarantees under the conditions presented by the bank”.

Last December, the Government had already approved a State guarantee of 250 million escudos to TACV, to support the treasury and continue the operations and activities planned for 2022.

Regarding this guarantee, the Prime Minister, Ulisses Correia e Silva, then warned that, as in 2016, the Government has two options, either liquidating the company or creating conditions for them to continue to operate.

In February 2022, the Cape Verdean Government had granted another guarantee for a loan of 1.5 million euros to TACV, in view of “emergency needs”, such as the payment of salaries.

The Cape Verdean state plans to inject 1 billion escudos annually into TACV over the next three years, to guarantee the stability and recovery of the airline, before reprivatizing it in 2024, the minister of transport, Carlos Santos, announced in September.