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FNPF’s Fiji Airways Loan Brings Dividends

The Fiji National Provident Fund has told again how fund members are benefitting strongly from the loan to finance Fiji Airways jets. And it has responded in detail to the
01 Mar 2015 10:36
FNPF’s Fiji Airways Loan Brings Dividends

The Fiji National Provident Fund has told again how fund members are benefitting strongly from the loan to finance Fiji Airways jets.

And it has responded in detail to the small number of doubters. A joint statement signed off by chairman Ajith Kodagoda and chief executive officer Aisake Taito says:

“It is unfortunate that despite assurances on the security and performance of FNPF’s loan to Fiji Airways, a small number of people continue to doubt this lending arrangement.

“The FNPF Board appreciates these concerns and would like to assure our members that it takes seriously its fiduciary role in securing our members hard-earned retirement savings with the view to add value and grow these for their benefit.

Nothing else is more important. That is why, after a strict due diligence process, with stringent conditions based on commercial and independent assessment, FNPF initially provided a loan facility of $181 million to Fiji Airways in 2012.

“This loan arrangement was renegotiated after the successful delivery of the new aircrafts, and with Fiji Airways’ financial capacity to make early repayment of $19m.

“Fiji Airways has continued to perform well, benefitting from the new fleet and strong financial performance resulting in an after tax profit of $55.6m for the nine-month period ended 31st December 2014, indicate that FNPF’s confidence in their ability to repay their loan was not misplaced. We take this opportunity to congratulate Fiji Airways for their commitment and hardwork that has resulted in this stellar financial achievement.

So, how would the Fiji Airways loan benefit our members?

“The repayment of the principal and interest amount of this loan means increased returns on your funds. For example, additional income in excess of $12 million annually earned for our members.

“There are other benefits that will complement our investment in the tourism sector which includes increased occupancy rates in our hotels (InterContinental in Natadola, Holiday Inn, GPH, and Marriot, which will be opened next year). This will also generate employment opportunities for members.

“The Fiji Airways loan was granted in the best interest of our members.”

On that note, we would like to reassure
All our members of the following:
By FNPF chairman Ajith Kodagoda and chief executive Aisake Taito:

– The lending arrangement to Fiji Airways (based on purely commercial and independent basis with strict due diligence process & stringent conditions) include continued monitoring of their financial position to meet normal lending covenants.
The loan is adequately secured according to guidelines. These securities mainly comprise assets with re-sale value in the international market.
– The total loan facility now stands at $115 million (total loan approved was $181million, which was not fully-drawn given Fiji Airway’s strong cash position & a partial early redemption of $19million last year).
– Fiji Airways continues to comply with the payment arrangements and the company has not defaulted nor has it made a delayed payment.
– The interest rate on this loan is 8.75% as disclosed in our financial statements. These interests are paid 6-monthly in advance. FNPF Board negotiates and secures such arrangements with our members’ interest being paramount at all times and ultimately, for their benefit.
– The FNPF is pleased to have contributed towards a strategic project such as this. The purchase of the new aircrafts has and will continue to positively impact our nation, through tourist arrivals. Fiji Airways financial results for 2014 reflect this commitment.
As a long-term investor in tourism, Fiji Airways, plays an important role in bringing visitors into our country. This is our national carrier, it is Fiji-owned, and we need to be proud of having such national assets that will benefit our economy.

Feedback:  ranobab@fijisun.com.fj

 




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