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Covid-19: Shareholders believe that Cabo Verde Airlines project is not at issue

Icelandic shareholders who lead Cabo Verde Airlines assured on Friday that they are working on a long-term financial solution and believe that, although affected, the project is not at stake, although they need the support of the Cape Verdean government.

“The company’s shareholders continue to work on a long-term financial solution for the airline. Obviously, that work was affected by the covid-19 outbreak, but I remain confident that shareholders will find a solution that will ensure that the airline resumes operations. operations, connecting four continents via Cape Verde “, stated in an interview to Lusa, the president of Cabo Verde Airlines (CVA), Erlendur Svavarsson.

The flag carrier was privatized in March 2019, with the sale of 51% of the share capital to Icelandic investors, led by Icelandair, which already this year appointed Erlendur Svavarsson as chairman of the board and executive director of the CVA.

The objective is to transform the island of Sal into an aerial hub, implemented by CVA, for flights between Africa, Europe, North America and South America.

The Cape Verde airline, which has 330 workers, only plans to resume commercial flights, suspended since March 18 due to the covid-19 pandemic, on July 1.

Financing

Last February, before the effects of the covid-19 pandemic, the Icelandair group announced that the Cape Verdean airline is expected to show positive results in 2021, although assuming the need to contract long-term financing.

The information was contained in the report with the consolidated financial statements for the 2019 financial year of the Icelandic airline, which through its subsidiary Loftleidir Icelandic EHF directly controls, since March 1, 2019, 36% of the CVA.

“CVA is looking for long-term financing. If long-term financing is not guaranteed, it could adversely affect the operation,” reads the Icelandair group’s report of 7 February.

The Government of Cape Verde suspended all international flights for an initial period of 30 days on March 18, to contain the spread of the covid-19 pandemic to the archipelago, leaving the company without commercial flights and only a few calls for repatriation (763 passengers nationalities on six flights since March 24).

For Erlendur Svavarsson, CVA is today in a “similar position” to many other airlines, which have had to reduce or interrupt their scheduled flights.

“The company will need to take measures to control the cash flow and count on the support of shareholders and the Government of Cape Verde to be able to return to the skies, still this year. All the interested parties remain firm in their commitment with the company”, guaranteed the chairman of the airline’s board of directors.

Long term

Despite current circumstances, which Erlendur Svavarsson stresses that “are not exclusive to Cabo Verde Airlines”, shareholders “believe that the long-term prospects for connecting four continents via Cape Verde remain strong”.

“Cape Verde is a vibrant and beautiful destination, which has been growing in popularity. This trend will continue in the long run. Island countries depend on air connectivity and this strong requirement will return as soon as the covid-19 storm passes,” he said.

Today, Cape Verde has 13 days, out of 20 planned, in a state of emergency, declared to contain the pandemic caused by the new coronavirus, with the population obliged to the general duty of withdrawal, with limitations on movements, closed non-essential companies and all inter-island connections. suspended, among other measures.

The country has seven confirmed cases of covid-19, caused by a new coronavirus, between the islands of Boa Vista (4), Santiago (2) and São Vicente (1), in addition to one death.

On March 22, in an interview with Lusa, the Prime Minister of Cape Verde stated that the CVA will be one of the companies subject to measures to support the economy and that the sale of the 39% that the State still holds in the company will be postponed.

“The CVA suffers the consequences of the measures that all countries are taking to close the air borders, including those that Cape Verde has already taken. The CVA is obviously included in the range of companies that will be the object of measures to support the economy”, he assumed.

In March 2019, the State of Cape Verde sold 51% of the then public company TACV (Transportes Aéreos de Cabo Verde) for 1.3 million euros to Lofleidir Cabo Verde, a company 70% owned by Loftleidir Icelandic EHF (which became with 36% of CVA) and 30% by Icelandic businessmen with experience in the aviation sector (who assumed the remaining 15% of the 51% privatized share).

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