Biman borrows $ 66.5m to pay dues against two new aircraft

Biman Bangladesh Airlines has taken US$ 66.50 million loan from Sonali Bank Limited to adjust pre-delivery payment (PDP) dues for two more Boeing aircraft.

The country's largest state-owned commercial bank (SoCB) had arranged the loan for the national flag carrier by taking deposit from the central bank's foreign exchange reserve, officials said.

Bangladesh Bank (BB), the country's central bank, has already deposited the fund with Sonali Bank UK Limited as short-term investment.

The government holds 51 per cent stake of the bank in London and Sonali Bank Ltd the rest 49 per cent.

"We've provided such foreign currency support to the Sonali Bank Limited for public interest," a senior official at BB told the FE. The central bank has obtained necessary guarantee from the government in this connection.

The Sonali Bank headquarters in Dhaka has collected the deposit from the central bank at LIBOR (London Inter Bank Offered Rate) plus 1.0 per cent interest.  

Later, the SoCB lent the money at an annual interest of LIBOR plus 2.0 per cent, according to a senior official of the Sonali Bank Limited.

"We've to repay the loan in next five years," he said, without elaborating.

The national flag carrier has paid $ 54 million from its latest credit as an instalment of a $ 159 million credit with the Sonali Bank UK Limited and the rest $12.50 million to Boeing as maintenance charge.

The central bank earlier provided $159 million as investment to the Sonali Bank UK Limited for making PDP for the two more Boeing aircraft.

"We've availed of the foreign currency loan to clear dues with the Sonali Bank UK Limited and providing maintenance charge to the Boeing," Shakil Meraj, Biman's general manager, told the FE Monday.

In 2008, the Biman had signed an agreement with Boeing for purchasing 10 aircraft -- six have already been added to the Biman fleet.

Two more aircraft are scheduled to join the operational fleet by 2018 and the rest two were expected to come by 2019.

Biman was founded in 1972 as a fully government-owned entity. It was converted into a public limited company during the tenure of the last caretaker government. But its equity holding is still wholly retained by the government.

siddique.islam@gmail.com