Spanish Pubcaster May Take out Loans to Maintain Liquidity
The move would signal a break with past five years of balanced budget.
MADRID -- Spanish pubcaster RTVE opened the door to the possibility of seeking credit from financial entities, marking a shift from a 2006 requirement to balance the budget and avoid debt.
RTVE's administrative board unanimously agreed to look into three-month credits in order to maintain liquidity at the state-owned broadcaster, with sources telling the Spanish financial daily CincoDias that loans would not exceed 60 million euros ($80.8 million).
"It's putting the bandage on before there is a wound," the unidentified source told the newspaper. "What we have approved is to start negotiations with financial entities to get credit, but we won't resort to that if, in the end, it is unnecessary."
In 2006, RTVE saw it's whopping 7.8 billion euro debt absorbed by the government on the condition that it not incur any further debt barring "temporary" imbalances. The RTVE board cited "temporary" imbalances in its decision to explore credit options Wednesday.
The board addressed the budgetary imbalance after RTVE Corporate Director General Jaime Gaiteiro signaled a lack of liquidity that would prevent the company from paying out its regular payments -- including salaries -- for the first quarter of 2012.