EU Clears Interim Financing For Austrian Air

The European Commission approved EUR200 million euros (USD$266 million) of government-backed bridge financing for flag carrier Austrian Airlines (AUA), the EU executive said on Monday.

The decision does not affect AUA's sale to Lufthansa in a deal under which Austria will assume around EUR500 million of AUA's debt, and which also needs approval by the Commission.

"The aid will be in the form of a guarantee on loan facility... to keep the company operating until the commission can take a position on another issue involving possible state aid linked to its privatisation," the Commission said in a statement.

Lufthansa on December 5 signed the purchase of the 42-percent state stake in AUA. It plans to take it over fully for up to EUR377 million once Brussels approves the acquisition.

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