SUNBIZ

$20m Further Early Loan Repayment By Fiji Airways To FNPF

Record 2014 financial performance of Fiji Airways has allowed it to make a further lump sum repayment of FJ$20 million on its loan facility with the Fiji National Provident Fund.
29 Jul 2015 12:05
$20m Further Early Loan Repayment By Fiji Airways To FNPF
The Attorney-General and Minister for Finance, Aiyaz Sayed-Khaiyum (right) with (from left) Fiji National Provident Fund chairman, Ajith Kodagoda, Fiji Airways acting chief executive, David Bowden and Fiji Airways general manager Industry, International and Government Affairs, Shaenaz Voss. Photo: Jona Konataci

Record 2014 financial performance of Fiji Airways has allowed it to make a further lump sum repayment of FJ$20 million on its loan facility with the Fiji National Provident Fund.

The lump sum further repayment now reduces the Fiji Airways loan with the FNPF to below $100 million dollars.

The announcement was made yesterday during a press conference at the FNPF boardroom in Suva.

The airline said this repayment is over and above the Fiji Airways contractually-stipulated payment schedule with the FNPF for the initial down payment for its three A330 aircraft.

Fiji Airways acting chief executive, David Bowden, said by December, the balance will be less than 50 per cent of the original loan facility that we were granted by the FNPF.

The Attorney-General and Minister for Finance, Aiyaz Sayed-Khaiyum, welcomed the early payment and said it vindicated the FNPF’s investment in Fiji Airways.

“The Fijian people have every reason to be satisfied that the decision by their national superannuation fund to invest in our national airline was not only prudent but in their interests and the national interest,” he said.

“Fiji Airways is performing strongly, is repaying its loans well ahead of schedule and the Government has every confidence this will continue.”

 

Defying all criticism

FNPF chairman, Ajith Kodagoda, said: “By making this early repayment, Fiji Airways has once again reaffirmed the confidence the fund had in lending to our national carrier.”

He said when the transaction took place in 2013, there had been much negativity attached to it, to the extent the FNPF board members and management were harassed by certain people.

“There was a lot of negativity without understanding the process which actually went behind,” Mr Kodagoda said.

“This early repayment is testament of the strong financial performance of the company and the Fund is proud to have contributed to the success of Fiji Airways.”

Mr Kodagoda added in addition to its commercial merits, the FNPF’s decision to partner with Fiji Airways in its re-fleeting programme was also a strategic one.

“The airline is a key player in Fiji’s tourism sector and its success is critical for the country,” he said.

“It also complements the FNPF’s other investments in hotels such as InterContinental Fiji Golf Resort & Spa and the upcoming Marriott Hotel in Momi.”

 

The trail

In May last year, Fiji Airways had opted not to draw down $35.5 million of the original loan. It also made an early payment of just under $19 million towards the new loan facility because of its strong financial position.

To date, Fiji Airways has honoured of all its repayment obligations to the FNPF under the terms of the agreement between the two entities.

Mr Bowden said: “On the back of our financial results last year in which we recorded a profit of $60.8m, we are able to move ahead of our payment schedule.

“It’s another demonstration of how the sustainable financial and commercial decisions we are making for the airline are allowing us to meet all our obligations to our shareholders, staff and other stakeholders.”

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