NAC signs Rs 24b loan agreement with EPF and CIF

Following the signing of two separate agreements with Employment Provident Fund (EPF) and Citizen Investment Fund on Sunday and Monday by Nepal Airlines for 24 billion rupees, the way to bring two wide body Airbus series finalized.

June 13, 2017, 8:18 a.m.

Following the signing of two separate agreements with Employment Provident Fund (EPF) and Citizen Investment Fund on Sunday and Monday by Nepal Airlines for 24 billion rupees, the way to bring two wide body Airbus series finalized.

Nepal Airlines Corporation (NAC) signed a Rs 12-billion -loan -agreement with EPF on Sunday and CIF on Monday to buy two wide-body airplanes. As stipulated in the loan agreement, NAC will pay interest to EPF at the annual rate of 9 percent.

The loan it will take from EFF is just half of the total loan it needs to purchase two wide body airplanes. It has a plan to borrow Rs. 6 billion from Citizen Investment Trust (CIT).

After this agreement, NA secures Rs 24 billion worth of loan deals with CIT and EPF.

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 CIT. It had signed loan agreement for another Rs 12 billion with 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.

As per the agreement, NAC will have to clear the loan within 15 years.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.

 

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NAC MD Kansakar exchanging agreement

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