Fiji Airways has disclosed the challenges it faced during the COVID-19 pandemic, indicating that financiers had doubts about the airline’s survival. The airline’s recent annual report presented to Parliament highlighted that BNP Paribas, a French international bank specializing in aviation financial advisory, provided over 30 scenarios for debt repayment.
This assistance allowed Fiji Airways to evaluate its ability to meet debt obligations, identify necessary funding, and determine how to restructure existing debts. The report noted that the airline secured financing through Sovereign Government Debt Guarantees, leading to a total of $561.4 million in initiatives aimed at strengthening its cash reserves.
Key financing measures included:
– New loan facilities exceeding $380 million, with $65 million from the Asian Development Bank and additional domestic borrowings, with repayment terms of seven to 15 years.
– A four-year deferral on capital repayments for all loans.
– A nine-month deferral on aircraft lease rentals, which will be repaid over six years as part of the new loan facilities.
– An extension of seven years on the repayment terms for all existing loans.
Furthermore, the report noted that in 2021, shareholders approved a $200 million equity capital raising plan during a special general meeting. This involved the issuance of up to 47.3 million shares at a price of $4.22 each, reflecting a 74 percent discount from the share price at the close of 2019.
In October 2021, Fiji participated in this capital raise by contributing $101.9 million in exchange for 24.1 million ordinary shares. As a result, existing shareholders who opted out had their remaining shares offered to the Fiji National Provident Fund (FNPF) and the Unit Trust of Fiji. FNPF acquired 22.1 million shares, representing 30.02 percent of total ordinary shares, for $93.1 million, while the Unit Trust of Fiji obtained 1.2 million shares, equating to 1.58 percent, for $4.9 million.