April 20, 2020 / 9:36 AM / 3 months ago

Germany to grant rescue liquidity for carrier Condor: sources

FILE PHOTO: A banner reding "Condor we love flying" is seen next to a check-in counter of airline Condor at the airport in Frankfurt, Germany, September 24, 2019. REUTERS/Kai Pfaffenbach

MUNICH/FRANKFURT (Reuters) - Germany has agreed in principle to support struggling carrier Condor with emergency liquidity after the owner of Poland’s national airline LOT pulled out of a deal to buy the airline, two people close to the matter said on Monday.

Condor is a former unit of Thomas Cook, the holiday company that collapsed in September. With planes unable to fly because of travel restrictions, the airline had grounded its fleet and called for state aid.

A 380 million euro ($413.82 million) state bridging loan, that allowed the carrier to be rescued last year, is de facto being extended and Germany will offer an additional 200 million in liquidity, the sources said.

Condor said that talks with the government were ongoing, while the Economy Ministry declined to comment.

No decision on a longer-term capital structure of the group has been taken, the sources said, adding that Germany plans to launch a new sales process for the airline after the coronavirus crisis.

Earlier this month, sources familiar with the matter said Germany was ready to take over Condor as it expected the deal with LOT to collapse due to the industry turmoil caused by the coronavirus pandemic.

State-run Polish Aviation Group (PGL), which owns LOT, agreed in January to buy Condor for about 300 million euros, potentially creating a leading European aviation group with more than 20 million passengers a year.

But PGL earlier this month pulled out of the deal.

Reporting by Alexander Hübner and Arno Schuetze; Additional reporting by Klaus Lauer; Editing by Michelle Martin

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