Nepal Airlines Corporation (NAC) has signed a Rs 10 billion loan agreement with the Employees’ Provident Fund (EPF) in order to purchase two A320-200 aircraft.
NAC will sign an aircraft purchase agreement with the European plane maker this week to formalise the memorandum of understanding (MoU) signed on April 6, which will ensure the two aircraft are delivered in February and March 2015.
The interest on the loan has been fixed at 12% per annum, with a maximum 15 year term. The airline expects to be able to repay the money in seven to eight years.
NAC is required to make interest payments on a quarterly basis, which amounts to Rs 1.44 billion annually.
A fund will be created at a bank recommended by the EPF where NAC will deposit 30 percent of its monthly income.
Nepal Airlines Corp secures Rs 10bn loan
