June 13, 2017 12:50 AM NPT
Secures Rs 24 billion worth of loan deals with CIT, EPF
KATHMANDU, June 13: Nepal Airlines Corporation (NAC) has arranged funds for procuring two wide-body aircraft.
The national flag carrier on Monday signed loan agreement worth Rs 12 billion with Citizen Investment Trust (CIT). It had signed loan agreement for another Rs 12 billion with Employees Provident Fund (EPF) on Sunday.
Ram Krishna Pokhrel, executive director of EPF and Sugat Ratna Kansakar, managing director of NAC, signed the agreement on behalf of their respective institutions, CIT said, issuing a statement on Monday.
CIT said it agreed to provide loan to NAC for financing procurement of aircraft after the government agreed to sit as a guarantor. “NAC will have to pay 9 percent interest,” it added.
As per the agreement, NAC will have to clear the loan within 15 years.
NAC had signed similar loan agreement with EPF on Sunday. EPF is also providing Rs 12 billion loan to NAC at nine percent interest rate.
The meeting of board of directors (BoD) of NAC held in had approved a proposal to take loan from CIT and EPC to buy two Airbus A330-200. It signed loan agreements with EPF and CIT as per the decision of its BoD.
“We have signed loan agreements worth Rs 12 billion each with EPF and CIT at 9 percent interest rate,” Rabindra Shrestha, the spokesperson for NAC, said. “We immediately need to send Rs 8 billion as the first installment to the aircraft supplier company.”
NAC has already signed a Memorandum of Understanding (MoU) with AAR Corp to buy two wide-body aircraft at Rs 21.58 billion.
As per the MoU, AAR will have to send the first wide-body to Kathmandu by June 2018 and second aircraft one month later. Earlier, the American company had said that it would send the first aircraft within mid-December 2017 and another within mid-March 2018.
NAC will clear the payment to the US firm in two installments. It will send Rs 13.34 billion in the second installment. The national carrier had sent advance payment of Rs 100 million to AAR on February 15.
The wide-body aircraft will have 264 seats in economy class and 16 in business class.
The national flag carrier plans to use both the aircraft for long-haul flights. The first wide-body aircraft will make maiden flight either to Tokyo (Japan) or Seoul (South Korea). The aircraft can fly non-stop for 10 hours.