State may need to change law before offering Tallink €150 million loan

Tallink's Megastar, usually a passenger ferry, is now being used for cargo only.
Tallink's Megastar, usually a passenger ferry, is now being used for cargo only. Source: Andres Raudjalg/Tallink

Minister of Finance Martin Helme (EKRE) said the state plans to offer Tallink a liquidity loan of €150 million, which could later be formalized as the state owning a stake in the company. However, Helme said it may be necessary to amend the law to carry this out.

"At the moment, we are clearly talking about a loan. That is what they have been asking for," Helme said at a government press conference on Thursday.

Helme said this is the decision for the next stage. "If there is a wish, we can start talking about turning this loan into a holding. In the case of Tallink, it also needs a decision of the general meeting, which is a separate procedure in the case of a listed company."

"In such a case, we must also review whether we need to amend any laws in the Riigikogu," the Minister of Finance noted. Currently, according to existing laws, the Estonian state cannot grant loans directly to private companies unless they are its own companies.

Helme said all loan terms are still being negotiated, including loan term, guarantees and sureties. He said Tallink is the only company that has so far made a specific application for support for €150 million.

Foreign Minister Urmas Reinsalu (Isamaa) said the state is initially talking about granting a liquidity loan for three years.

Tallink's head Paavo Nõgene told ERR on Wednesday both the Ministry of Finance and the Ministry of Economic Affairs were working out the details of the loan.

Nõgene said that it is not yet possible to comment in detail on the content of the loan agreement or the specific schedule for the development of the agreement.

At the beginning of April, Tallink announced that it needed a liquidity loan for three years due to the coronavirus outbreak and its economic effects. At that time, the company offered direct loans, temporary share capital increases and bonds as solutions.


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Editor: Helen Wright

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