Foreign banks loan $457 mln to Vietnam Airlines

Citibank, Development Bank of Singapore (DBS), and HSBC Monday entered a joint financing agreement under which they will lend Vietnam Airlines (VNA) $457 million for purchasing eight new airplanes.

The national flag carrier is expected to use the loan to buy 8 Airbus A321-231S airplanes from French aircraft maker Airbus.

The lending includes a $400 million loan arranged by HSBC and Citibank with the support of European credit insurers represented by France-based credit insurance firm Euler Hermes, a subsidiary of German Allianz Group.

The rest, funded by HSBC and DBS, is guaranteed by the Ministry of Finance.

Eight new aircraft, which will be handed over within this year, will enable VNA to offer more medium and long-haul domestic and international flights.

The carrier in 2007 and 2009 signed a contract to buy 26 new Airbus A321-231A for 2011-2014 delivery. This is part of plans to expand the fleet to 115 aircraft by 2015 and 170 by 2020.

“The contract will help realize Vietnam Airlines’ plans to improve and expand the fleet to enhance its performance on a global scale,” said Pham Ngoc Minh, general director of VNA.

Sumit Dutta, CEO of HSBC Vietnam said that following the success of the financing agreement made in 2009 for the purchase of 6 ATR 500, HSBC Vietnam now continues to assist VNA’s plan to expand and become a world-class carrier. – Tuoitre

Tags: Vietnam airlines

Posted by VBN on May 24 2011. Filed under Aviation, Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry