The government of the Republic of Cape Verde has approved further endorsement for the national airline TACV “to support the its treasury allowing the continuity of the operations and activities foreseen for the current year of 2022”.
This time it is about a loan of 250 million Cape Verdean Escudos (around USD 2.3 million). With this, Cabo Verde Airlines will improve its liquidity.
“The State of Cape Verde, as the majority shareholder and given the relevant role that TACV plays in the dynamics of the national economy, namely in terms of tourism and commerce, recognizes the obvious importance of supporting the company in mobilizing these financial resources, through the granting of this endorsement”, reads the resolution published in the Official Gazette, indicating that the term of the operation is four years.
The State also mentioned that in order to meet the financing needs presented in its Recovery and Stabilization Plan, the company has also resorted to other sources to raise funds, such as bank credit.
TACV has received state aid several times during the pandemic.
In February, the Cape Verdean government had granted another guarantee for a loan of USD 1.58 million to TACV, in view of “emergency needs”, such as the payment of salaries.
In March 2019, the State of Cape Verde sold 51% of TACV for USD to Lofleidir Cabo Verde, a company 70% owned by Loftleidir Icelandic EHF (Icelandair group, which took 36% of Cabo Verde Airlines — company’s trade name) and 30% by Icelandic entrepreneurs with experience in the aviation sector (who took over the remaining 15% of the privatized 51% share).
However, the company was renationalized in July 2021, after several breaches in management, having only resumed flights in December last year.
In the Cape Verdean parliament, a Parliamentary Commission of Inquiry (CPI) is taking place on the privatization (2019), renationalization (2021) of TACV and the exit of the company from the domestic market (2017).
The Cape Verdean state will annually inject 1 billion escudos (USD 9.5 million) into TACV over the next three years, to guarantee the stability and recovery of the airline, before reprivatizing it in 2024, minister Carlos announced in September.