The Financial Express

Purchase of four aircraft from Boeing

Biman to borrow $516.34m to make ‘delivery payment

| Updated: October 22, 2017 08:47:50

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Biman to borrow $516.34m to make ‘delivery payment’

Biman Bangladesh Airlines (BBA) will borrow US$ 516.34 million to make final payment against the delivery of four passenger aircraft as part of its move to rebuild its fleet, officials said.

The national flag carrier has already made pre-delivery payment (PDP) to the US-based Boeing for the procurement of last four Boeing aircraft as per agreements under the government's sovereign guarantee, they added.

"The rate of interest will be lower if Biman takes out loan from international financial institutions /lenders under sovereign guarantee. For this, procurement price will also come down," Shakil Meraj, General Manager (Public Relations) and focal point of BBA, told the FE on Thursday.

Biman already completed pre-delivery payment to the Boeing for procurement of four 787-800 aircraft, he mentioned.

Currently, fund is needed urgently to make the final delivery payment. The civil aviation and tourism ministry has sought sovereign guarantee from the finance ministry in favour of BBA, a senior official of the civil aviation ministry said.

"We have received a letter from the civil aviation ministry, seeking sovereign guarantee for delivery payment. The finance ministry is working on this issue," a high official of the finance ministry said.

A deal was signed between Finance Division and Sonali Bank, UK to receive a loan of US$ 136 million for making pre-delivery payment. The bank has already given US$ 117.9 million to Biman.

The BBA signed two agreements with the 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 in February-March 2014. The fifth of the Boeing series 737-800 was delivered in 2015.

Four other aircraft, mostly 787-800, popularly known as Dream liner, are scheduled to be delivered by 2018 and 2019. It was scheduled to be delivered by 2019-2020.

Earlier, BBA cancelled a loan agreement with the Canadian company M/S Maryna (private) Limited after the latter's failure to provide the airlines with US$ 136.05 million in loans for pre-delivery payment to the Boeing within the stipulated time to buy the four passenger aircraft, a source concerned said.

Subsequently, the Biman authority has had talks with Sonali Bank UK, a wing of the biggest state-owned commercial bank, he added.

In November 2015, the national flag carrier signed a loan agreement with the Canadian company for pre-delivery payment financing to the US-based Boeing, he also said.

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