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VEB and Hungarian Government Agree to Settle Malev Airlines’ Bank Debt

Vnesheconombank and the Government of the Republic of Hungary have agreed to settle Malev Hungarian Airlines’ bank debt. The relevant settlements have been arranged during the working visit of the Russian President Vladimir Putin to Hungary.

As mentioned by Sergey Gorkov, the Chairman of Vnesheconombank, lengthy negotiations with the Hungarian party have resulted in an out-of-court settlement. In the coming days, the Bank and the Government of Hungary plan to conclude a memorandum of understanding, reflecting the parties’ intentions to settle the debt, and setting forth general terms and conditions including the repayment period.

As of the liquidation date, the indebtedness of Malev Airlines on the loans granted by Vnesheconombank amounted to EUR 126 million.

Seeking to promote Russia-Hungary bilateral economic cooperation in Eastern Europe, in 2007 Vnesheconombank assisted in the financing of a transaction to acquire 99.95% of shares in Malev Hungarian Airlines. Between 2007 and 2010, Vnesheconombank provided Malev with more than EUR 100 million worth of funding for daily operations. By decision of the Budapest Court, liquidation proceedings against the company were initiated in February 2012. Since then, Vnesheconombank has been making attempts to enforce the debt.


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