Biman to get US$ 45.50m in loan from Canada soon

Dhaka,  Wed,  20 September 2017
Published : 10 Mar 2017, 23:58:19

Biman to get US$ 45.50m in loan from Canada soon

Rezaul Karim

Biman Bangladesh Airlines, the national flag carrier, is set to receive US$ 45.50 million in loan soon from Canada for payment of two aircraft, officials concerned said.

The loan will be utilised for re-financing of loan that had been taken from the country's largest state-owned bank for making pre-delivery payment (PDP) to Boeing series 737-800 aircraft in 2015, they added.

The standing committee on non-concessional loan approved the loan most recently.

The loan has an interest rate of three months LIBOR plus 0.55 per cent and is repayable in over 12 years.

In April last year, a separate circular was published in different local and international dailies to take out US$ 120 million of loan for re-financing.

Different banks and international lenders submitted tenders to provide funds. Of the tenders, the proposal made by Standard Chartered Bank has been selected as the lowest bidder.

Toronto-Dominion Bank, a Canadian multinational banking and financial services corporation, is also considered the second lowest bidder, a source concerned said.

Later, a committee formed by the Ministry of Civil Aviation and Tourism sat in meeting twice with Standard Chartered Bank for relaxing proposed loan conditions.

But the bank submitted a fresh term sheet for the loan after negotiations. As a result, the standing committee did not approve the loan proposal.

The standing committee has approved the loan proposal made by Canadian Bank due to its flexible conditions than that of Standard Chartered Bank.    

Earlier, a Canadian financier -Maryna Limited- had signed an agreement to make pre-delivery payment (PDP) worth US$ 136.05 million to Biman Bangladesh Airlines to buy four passenger aircraft as part of rebuilding its fleet.

But Maryna Limited had failed to give PDP support to buy four passenger aircraft. At last, the government cancelled the agreement with the financer.

The national flag carrier started negotiations afresh with Sonali Bank (UK) Ltd to get funds for the purchase of aircraft from Boeing Company following cancellation of its previous contract with a Canadian financier.

In November 2015, it signed a loan agreement with the Canadian company for PDP financing of the US-based Boeing Company.

Biman already sent a letter to the firm for withdrawal of the loan agreement, according to its 157th board of directors meeting held in December.

Biman Bangladesh Airlines signed two agreements with Boeing in 2008 for purchasing four 777-300ER aircraft, two 737-800 aircraft and four 787-800 aircraft to modernise its fleet.

Four 777-300ER aeroplanes joined the Biman fleet in October-November 2011 and February-March 2014. The fifth of the Boeing series 737-800 was delivered in 2015.

The four remaining aircraft, mostly 787-800, popularly known as Dreamliner, are scheduled to be delivered by 2019 and 2020.

Some Tk 4.50 billion has been provided to Boeing as payment for the last two Boeing aircraft.
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