Cathay Pacific given an extra year to tap Hong Kong government’s US$1 billion rescue loan facility
- The bridging loan facility was part of the embattled airline’s HK$39 billion recapitalisation package aimed at helping it through the pandemic
- Hong Kong’s flagship carrier expects 2021 to be filled with uncertainty, as pace of passenger traffic recovery remains slow
The Hong Kong government has extended the drawdown period of the HK$7.8 billion (US$1 billion) rescue loan facility it extended to Cathay Pacific, giving the embattled airline another year to access the funds if needed.
The carrier has not drawn down on the credit facility – in other words, not borrowed from it – in the last 12 months, thanks to a slew of measures it took to preserve cash, chief executive officer Augustus Tang was quoted as saying in a press release on Tuesday. The loan facility carries an interest rate equivalent to the Hong Kong Interbank Offered Rate (Hibor) plus a spread of 1.5 per cent per annum, according to a Cathay Pacific circular dispatched to shareholders last year detailing the recapitalisation package.
“We are thankful for the government’s decision to extend the drawdown period, which provides us with more flexibility to manage our liquidity position,” Tang said.
