Fiji Airways has disclosed the challenges it encountered during the COVID-19 pandemic, particularly regarding its financial standing. In its annual report presented to Parliament, the airline revealed that financiers were uncertain about its survival amidst the crisis.
The report highlights that BNP Paribas, a prominent French aviation financial advisory bank, provided over 30 different scenarios to help the airline assess its ability to meet its debt obligations and determine necessary funding and restructuring options.
With support from Sovereign Government Debt Guarantees, Fiji Airways managed to raise critical financing, securing $561.4 million to strengthen its cash reserves during the pandemic.
Key financial measures taken include:
– Securing new loan facilities totaling over $380 million, which included $65 million from the Asian Development Bank and additional domestic borrowing, with repayment terms extending from seven to 15 years.
– Deferring loan capital repayments for four years across all loans.
– Postponing aircraft lease rental payments for nine months, with repayment scheduled over six years, included in the new loan facilities.
– Extending repayment terms for all existing loans by seven years.
The report also noted that in 2021, the company’s shareholders approved a $200 million equity capital raise at a significant discount. The capital raise allowed Fiji to contribute $101.9 million in exchange for 24.1 million ordinary shares.
Since the majority of existing shareholders opted out, the board decided to offer leftover shares to the Fiji National Provident Fund (FNPF) and the Unit Trust of Fiji. As a result, FNPF purchased 22.1 million ordinary shares for $93.1 million, accounting for 30.02 percent of the total ordinary shares, while the Unit Trust acquired 1.2 million ordinary shares for $4.9 million, representing 1.58 percent.