COPENHAGEN, July 9 (Reuters) - A 400-million-euro credit facility given to Scandinavian airline SAS by the governments of Sweden, Denmark and Norway in 2012 was not illegal under European Union state aid rules, the EU Commission said on Wednesday.
The Commission opened its investigation into the revolving credit facility (RCF) last year, saying it “doubted” it had been carried out under market conditions because the exposures of the governments and the banks involved were different.
EU rules ban state aid which distorts competition and says that support for companies has to be made on the same terms as a private player operating under market conditions would offer.
On Wednesday, the Commission said while the exposure of the states and banks were different, the facility was accompanied by a robust business plan to save the ailing airline which was under considerable pressure from low-cost competitors.
“The investigation has also established the robustness of the underlying assumptions of the business plan. Indeed, the plan has been reviewed by external advisers who confirmed its credibility,” it said in a statement.
“The Commission reached the conclusion that the new RCF was concluded on terms that a private investor operating under market conditions would have accepted,” it said.
Although SAS trimmed its full-year profit forecast in May, restructuring in recent years helped return it to profit in 2012/2013 for the first time in more than five years.
Had the Commission found that the aid was illegal, SAS would have been obliged to repay it. However, the RCF was never used and was cancelled by March 2014, the Commission said.
The regulatory arm of the European Free Trade Association (EFTA), which launched a similar investigation at the same time, reached the same conclusion as the Commission, according to a statement from the EFTA. (Reporting by Sabina Zawadzki; editing by Jason Neely)