The Nepal Airlines Corporation (NAC) said on Thursday, October 17, that it has paid Rs 6.32 billion in instalments, since the new leadership took over its management, for the loans it had taken to purchase aircrafts for expanding its international flight operations.
The national flag carrier had taken loans from the Employees’ Provident Fund (EPF) and Citizen Investment Trust (CIT) to buy two narrow-body and two wide-body aircrafts.
“A total of Rs 530.95 million, including full instalment for the two narrow-body aircrafts for the month of Asoj (or mid-September to mid-October) and partial instalment for two wide-body planes, was paid,” NAC said in a statement.
However, it has only four years remaining to repay the Rs Rs 9.98 billion loan secured on June 18, 2013 from EPF to purchase a narrow-body aircraft. The loan was backed by a government guarantee of Rs 10 billion, with a commitment to pay instalments every three months over a 15-year period.
In addition, on June 11, 2017, NAC signed another agreement with the EPF for a Rs 11.99 billion loan, with a guarantee of Rs 12 billion from the government, to acquire a wide-body aircraft of Airbus.
In total, EPF provided NAC with Rs 21.97 billion for aircraft purchases.
EPF spokesperson Damodar Prasad Subedi, told NBA earlier in August this year, that the NAC paid back Rs 1.62 billion in the last fiscal year, 2023/24. However, despite the payments, NAC’s debt obligations have been increasing, with Rs 28.87 billion still owed to EPF.
The repayment deadline for the loan taken to buy the wide-body aircraft is eight years away.
Similarly, NAC secured a Rs 12 billion loan from CIT to purchase a wide-body aircraft, with a similar 15-year repayment term.
Amid increasing debt obligations, NAC has been lobbying for interest waivers for the time impacted by the Covid-19 pandemic and an extension of the repayment period. The corporation said in the statement that it has requested the CIT and EPF, in writing, to increase the number of instalments and facilitate easier repayment terms. The matter is under discussion, the statement reads.
(With inputs from RSS)