Fiji Airways has disclosed the challenges it faced during the COVID-19 pandemic, particularly regarding uncertainty from financiers about the airline’s survival. The airline’s recent annual report to Parliament highlighted that BNP Paribas, a French bank specializing in aviation financial advisory, provided over 30 different repayment scenarios for the airline’s debt.
This analysis allowed Fiji Airways to evaluate its ability to meet debt obligations, identify necessary funding, and determine required debt restructuring. The report noted that financing was secured with the help of Sovereign Government Debt Guarantees to address urgent COVID-related financial needs, enabling the airline to raise $561.4 million to improve its cash reserves.
Key financial strategies implemented included:
– New loan facilities totaling over $380 million, which included $65 million from the Asian Development Bank and further domestic loans, with repayment terms spanning seven to 15 years.
– Deferrals of loan capital repayments for all loans for a duration of four years.
– Nine-month deferrals on aircraft lease rentals, to be repaid over six years as part of new loan facilities.
– A seven-year extension on repayment terms for all existing loans.
Additionally, the report specified that in 2021, shareholders approved a capital raise of $200 million through the issuance of up to 47.3 million shares at $4.22 each, representing a 74 percent discount from the end of 2019’s share price. In October 2021, Fiji contributed $101.9 million as new equity for 24.1 million ordinary shares.
The remaining shareholders chose not to participate in the capital raise, leading the board to offer the unclaimed shares to the Fiji National Provident Fund and the Unit Trust of Fiji. FNPF acquired 22.1 million ordinary shares, representing 30.02 percent of total ordinary shares, for a total of $93.1 million. The Unit Trust of Fiji purchased 1.2 million ordinary shares, equivalent to 1.58 percent of total ordinary shares, for $4.9 million.