Fiji’s A-G clarifies loan plan

Fiji Airways aircraft at the Nadi International Airport. Picture: BALJEET SINGH/FT FILE

Attorney-General and Economy Minister Aiyaz Sayed-Khaiyum said Fiji Airways wanted to use the $106.4million increased Government loan guarantee to the airline as part of its “contingency financing actions”.

Speaking in Parliament yesterday, he said Fiji Airways “targets to pursue partial refinancing of the Fiji Airways Aviation Academy by $F50 million”.

“This would involve raising finance using the incumbent aviation academy assets, comprising the building and two full flight simulators – which is asset-based finance,” the A-G said.

“Fiji Airways, in discussion with the Asian Development Bank, to provide a $US25million ($F52 million) asset-based loan with a 10-year term to the academy division based on the following requirements — the breakdown proposed is HFC Bank — Reserve Bank of Fiji which is under the Disaster Rehabilitation Containment Facility — 15-year term Fijian $30 million, Fiji Development Bank-Reserve Bank of Fiji again under the Fiji Import Substitution and Export Finance Facility term of 15 years and Fijian $20 million, and ADB $US25m ($F52 million) secured loan facility funding for the Fijian Aviation Academy – a 10-year loan $US25m ($F52 million) which in current exchange terms is $56.4 million.

“In light of this, Fiji Airways requests an additional $25million government guarantee for its off-shore borrowings from ADB, and an additional Fijian $50million for its local borrowings. Taking into account exchange rate fluctuations, the total proposed government guarantee for Fiji Airways amounts to Fijian $106.4million.”

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