Fiji Airways has disclosed the challenges it faced during the COVID-19 pandemic, as financiers were uncertain about the airline’s survival. An annual report presented to Parliament revealed that BNP Paribas, a French bank specializing in aviation financial advisory, provided over 30 different scenarios for the airline’s debt repayment capabilities.
The airline explained that this analysis helped assess its ability to meet debt obligations, identify necessary funding, and determine re-profiling requirements for existing debts. To support urgent COVID financing, Fiji Airways secured $561.4 million backed by Sovereign Government Debt Guarantees to strengthen its cash reserves.
Key financing measures implemented included the following:
– New loan facilities totaling over $380 million, including $65 million from the Asian Development Bank and additional domestic borrowings, with repayment terms spanning seven to 15 years.
– A four-year deferral on loan 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.
– A seven-year extension on repayment terms for all existing loans.
The report also noted that in 2021, shareholders approved a special equity capital raise of $200 million through the issuance of up to 47.3 million shares at an issue price of $4.22 each, reflecting a 74 percent discount compared to the share price at the end of 2019.
In October 2021, the Fijian government took part in this capital raise, contributing $101.9 million for 24.1 million ordinary shares. However, the remaining shareholders chose not to participate, leading the board to offer the unsold shares to the Fiji National Provident Fund and the Unit Trust of Fiji. The FNPF acquired 22.1 million shares, amounting to 30.02 percent of the total shares issued, for $93.1 million, while the Unit Trust of Fiji purchased 1.2 million shares for $4.9 million.