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Biman gets $315m from Sonali Bank for Dreamliner purchase

Sonali Bank has issued $315 million (equivalent to Tk 2,655.92 crore) credit facility to Biman Bangladesh Airlines for purchase of two new Boeing 787-9, known as Dreamliner, with five years as grace period to start instalment payment by the national flag carrier.

The foreign currency loan was issued for a period of 10 years with the repayment starting from 2020.Due to huge loan repayment burden on Biman, the government would pay instalments for five years ending in 2024.

Biman has been making around Tk 300 crore in operating profits against its loan repayment burden of Tk 1,200 crore per year, leaving no option for the government but to repay the loan instalments for the first five years, finance ministry officials said.

According to a finance ministry document, the outstanding debt of the entity stood at around Tk 9,000 crore.As the entity has been suffering from a net loss for long, it has been running with the assistance from the government.

A tripartite agreement was signed among the finance division of the finance ministry, Biman and Sonali Bank to facilitate the procurement of the two new Boeing 787-9, ministry officials said.

Apart from singing the tripartite loan agreement, the government has provided sovereign guarantee against the loan, making the loan free of risk and convenient for Sonali Bank, banking sources said.

As per the terms of conditions, Sonali Bank has received the entire amount from the Bangladesh Bank as the central bank’s board on December 4 approved the proposal of Sonali Bank to keep BB’s $315 million deposit with Sonali Bank so that the bank can issue the credit facility for the procurement of the aircraft.

The government and Biman would now clear the loan in 10 years at an interest rate of 3 months USD LIBOR (London Interbank Offered Rate) plus 1.5 per cent.Of the total 40 instalments, the government will pay 20 instalments and the rest 20 will have given by Biman.

Sonali Bank issued three other credit facilities to Biman earlier — $ 65.5 million, $80 million and $220 million.The $220 million loan facility was given to buy the recently procured Boeing 787-9.According to a press release issued by Biman Bangladesh Airlines on Thursday, the two new Boeing 787-9, known as Dreamliner, would arrive in the country today and Tuesday.

Prime minister Sheikh Hasina, who named the Dreamliners ‘Sonartori’ and ‘Achinpakhi’, is expected to inaugurate the new aircraft along with Biman’s mobile app on December 28.

With the addition of two aircraft, the national flag carrier’s fleet will have 18 planes.Boeing 787-9 Dreamliner has a total of 298 seats, including 30 business class, 21 premium economy class and 247 economy class seats.

Biman has planned to operate Manchester and Heathrow, London routes from January 5, 2020.The Biman, however, gave no assurance to the government whether the addition of the two modern aircraft and the repayment of loans would help it to turn into a profit-making entity.

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