Nepal Airlines Corp concludes loan agreement with EPF, CIT
Kathmandu, June 12
Nepal Airlines Cooperation (NAC) has concluded the loan agreement of Rs 12 billion each with the Employees Provident Fund (EPF) and Citizen Investment Trust (CIT) today to purchase two aircraft.
EPF and CIT both agreed to extend loan to the national flag carrier at interest rate of nine per cent per annum, with payback period of 15 years.
EPF and CIT agreed to issue loan to the national flag carrier on government guarantee. Both institutions will release Rs four billion each to NAC as first instalment.
NAC is going to purchase two wide-body airbus aircraft through agent company — AAR Corp — which was selected through global bidding in mid-January this year. As per the agreement with the supplier, NAC was supposed to send the first tranche of around Rs eight billion to the supplier as per the agreement.
NAC’s Managing Director Sugat Ratna Kansakar has said that the payment will be sent to aircraft manufacturer — Airbus — through escrow account. Escrow generally refers to money held by a third-party on behalf of transacting parties. As the manufacturer Airbus had not taken part in the bid, the agent company will be supplying two aircraft to NAC.
As per initial deal with AAR Corp, the supplier had agreed to deliver first aircraft by September this year and another by March of 2018. However, Kansakar has said that the delay in sending payment will affect the delivery schedule.
“We will be receiving both aircraft by June next year, with an interval of one month.”
While signing an agreement with the supplier in April, the national flag carrier had pledged to send the first tranche of around Rs eight billion within first week of May.
The loan agreement with CIT was signed by Executive Director of CIT Ram Krishna Pokharel and Kansakar, while the pact with EPF was signed between Kansakar and Officiating Administrator of EPF Deepak Rauniyar.