Fiji Airways subsidiary, Fiji Link’s brand new ATR 72-600 aircraft at the ATR factory in Toulouse, France. It’s expected to arrive by month-end. Photo: FIJI AIRWAYS TWITTER
Rachna lal
SUVA
Fiji Airways has renegotiated its loan from the Fiji National Provident Fund taken for down payment of its three new Airbus A330s. The loan has been brought down from $181.2 million to $120 million, $60 million lower than the original agreed loan facility.
In addition to scheduled capital repayments, Fiji Airways has now opted to make an additional early pre-payment of just under $19m, bringing the new loan facility down to $120m.
Fiji Airways managing director/chief executive, Stefan Pichler, they are pleased to move into a new phase of business partnership with FNPF as a ‘win-win’ refinancing of a lower capital amount.
“We have to abide by our confidential commercial arrangement clauses, but both Fiji Airways and FNPF understand the public interest surrounding the loan which allowed us to make initial down-payments on our new A330s,” he said.
“I would like to reiterate we have been diligent on following our repayment schedule strictly, on-time, and now ahead of time bringing the loan down to two thirds of the original loan amount.”
FNPF chief executive, Aisake Taito, said the conduct of this account has been a success for the fund members.
“The successful delivery of the three aircraft, the decision by Fiji Airways not to fully draw the initial loan amount by over $35 million and the early repayment of $19 million reduced the risk of this lending. These were the key bases for the loan restructure,” he said.
Mr Pichler said the past two quarters has been good for Fiji Airways with an encouraging outlook this year. He said therefore, we will be able to exceed their cash flow requirements even after paying back part of this loan.
“We have a very conservative cash flow planning because the airline industry is volatile and very competitive. We want to make sure we are covered with enough cash at all points in time. On the other hand, we don’t like debt and want to pay loans back as fast as possible,” he said.
As Fiji Airways has plans to purchase more new aircraft as part of its five-year Master Plan, Mr Pichler said they haven’t finalised their plans for financing the incoming aircraft yet.
“But we have a strong interest of international financial institutions to be part of the Fiji Airways 5 year Master Plan and the growth story behind hit. Once we have made our calls on financing these aircraft, we will advise,” he said.
Feedback: rachnal@fijisun.com.fj