Cathay Pacific Airways Ltd (0293.HK) said on Tuesday that the Hong Kong government has agreed to extend the HK $ 7.8 billion (US $ 1.01 billion) credit line by a year through June 2022, giving it more flexibility in managing liquidity.
The bridging loan was part of a $ 5 billion rescue package led by the Hong Kong government and Cathay’s main shareholders, Swire Pacific Ltd. (0019.HK) and Air China Ltd (601111.SS) last year to help the airline weather the COVID-19 crisis.
Cathay CEO Augustus Tan said in a statement that the airline has yet to take advantage of the loan as it has taken a number of cash-saving measures, but the renewal will give it more flexibility in managing its liquidity position.
As of December 2020, Cathay had HK $ 28 billion in liquidity and also raised HK $ 6.74 billion in convertible bonds in February and $ 650 million in bonds last month. read more
The airline’s move towards the greatest possible access to liquidity at a time when passenger numbers are down more than 99% from 2019 levels follows rival Singapore Airlines Ltd.’s decision. (SIAL.SI) Issue S $ 6.2 billion ($ 4.69 billion) convertible bonds last month. read more
Singapore Airlines’ convertible bonds, signed by majority shareholder Temasek Holdings (TEM.UL), were an optional part of a S $ 15 billion bailout package announced last year under the leadership of a government investor.
Both airlines have no domestic markets at a time when international borders are still largely closed.
($ 1 = HK $ 7.7591)
($ 1 = S $ 1.3224)
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