AG moves motion to amend the Govt guarantee period for Fiji Airways loans

Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum has tabled a motion in parliament which seeks to amend the government guarantee period to Fiji Airways however National Federation Party Leader, Professor Biman Prasad says the opposition will not support the approval of the motion as they want detailed information on the status of the airline company.

While tabling the motion in parliament this morning, Sayed-Khaiyum says the guaranteed amount of $455 million is not changing.

Sayed-Khaiyum says originally the period of guarantee for the loans was valid for 3 years from 30th May 2020 to 30th May 2023 and now it will read valid until the guaranteed facilities are discharged by the lender or fully settled and that they now have a one off guaranteed fee of 15%.

He further says the Fijian government did not provide direct budget support like most governments have done, as Fiji opted for the guarantee and this now includes guarantees to all the institutions and companies that have lent or leasing aircrafts to Fiji Airways.

Sayed-Khaiyum adds the rationale for extension of the guarantee is because Fiji Airways did not want a cliff situation where all loans become payable at one point in time and says that Fiji Airways has sought extension of the time over which these loans can be paid.

He also says essentially for these financiers to have that level of comfort, they need the government guarantee to cover that particular period.

Sayed-Khaiyum says government sometime back, when Fiji Airways borrowed from FNPF had allowed the mortgage of 25% of its shares to FNPF.

Professor Biman Prasad says he is surprised they have to rush the motion when the guarantee is there.

He says they do not know where the airline is and raised the questions on whether we have looked at what is the total debt, what is the market value of the whole company right now, what percentage of the total market value would be government share of 51% and where the company will be in the next 3 to 5 years.

Professor Prasad says he maintains that it is the responsibility of parliament to see what’s happening in the airline company as government is the majority shareholder.

Sayed-Khaiyum will give his right of response later this afternoon.