In 2020, due to the coronavirus pandemic, AB “Novaturas” operated under crisis conditions. Compared to 2019, the number of passengers served by the company decreased by 86.8%, and the number of operated charter flights decreased by 85.8%. In response to the extraordinary situation, the company initiated a consistent implementation of crisis period program: actively cooperated with the government, state institutions, financial partners. Attracted financial support, loans, and drastically reduced costs allowed the company to ensure the continuity of operations and start 2021 on a optimistic note.
Nevertheless, the unfounded fears of other representatives of the tourism sector in the public media about the allegedly excessive state’s support to the company during this crisis period are attempts to present this achievement as a possible violation of the Competition Law. It is stated that “Novaturas” has been allocated as much money as it is needed by the companies of the entire sector. The company dissociates from unsubstantiated information disseminated by other representatives of the tourism sector and, considering the reputational risk, repeatedly presents financial aid measures received in 2020.
"Naturally, being the market leader, you always find yourself under a magnifying glass, where all the company's actions receive a lot of attention. Still, we want to distance ourselves from unfounded criticism from others in the tourism sector and emphasize that received state support accounts for only 2% of secured financial background. The remaining part was accumulated by attracting various types of loans, which “Novaturas” will have to repay in the future”, – says Audronė Keinytė, head of “Novaturas” group.
Agreed on loans worth EUR 8.5 million
The company clearly emphasizes that “Novaturas” has secured financial stability by received loans amounting up to EUR 8.5 million. The company undertakes to pay interest on the loans granted – it costs the company, contrary to what is stated in public.
Received loans:
10-million-euro investment in liquidity security
This year, “Novaturas” has agreed with the State Investment Management Agency on EUR 10 million investment in company bonds for a period of six years. This agreement allows the company to implement planned strategic initiatives and provides financial protection against possible future changes that may occur due to the changing dynamics of the coronavirus.
These funds reach the company through mixed financial instruments, i.e. issuing convertible and ordinary bonds. The fund has agreed to purchase convertible bonds issued by the company worth EUR 5 million and ordinary bonds, which are also worth EUR 5 million. The financing is granted for 6 years period, after which the Company undertakes to redeem the bonds. The Company also has the possibility to redeem all or part of issued bonds before the term of the agreement.
EUR 410 thousand of subsidies received
The company is classified as a large, therefore “Novaturas” did not apply for such subsidies as rent compensation, loan interest compensation, reimbursement of part of the employment related tax paid in 2019. Also, we did not applied to the state’s first business support package. As for the possibility of attracting investment from the State Investment Management Agency, the state last week opened the possibility for all companies with more than 50 employees and whose activities are affected by Covid-19 to apply for assistance from the fund.
“Last year, the company put a lot of effort and time into searching and evaluating all the opportunities to ensure business continuity. The financial partners also appreciated our efforts and provided support in entrusting Novaturas potential. Before signing the deal with the State Investment Management Agency, their specialists impartially assessed our business model, its sustainability, and the potential of the sector. Such an objective assessment of the efforts made by our team and the belief shown in the potential of the tourism sector show that we are moving in the right direction. We feel a responsibility to take care of all travelers, both when traveling safely and by providing all the information when planning a vacation, as well as taking care of fair compensation. Therefore, we will continue to do our best to achieve this goal in a transparent and fair manner”, – says A. Keinytė.
Ensured settlement with the customers
These financial assistance measures helped the company to ensure the company's liquidity and focus on the development of its core business. As well as to fulfill its obligations to travelers – at the end of February, the settlement process for trips that did not occur due to the pandemic was completed.
For 2021, the Novaturas Group has also secured a guarantee and insurance limit of EUR 11 million, which guarantees the fulfillment of obligations to travelers. This compulsory insurance for tour operators is one of the most important safeguards to protect the interests of travelers.