Nepal Airlines Corporation (NAC), a.k.a. Nepal Airlines (RA, Kathmandu), has sent a letter to two state-owned provident funds asking them to waive interest and penalties on outstanding loans as well as requesting a longer repayment period.
In an April 20 statement, NAC requested the waiver which would be backdated to the start of the pandemic three years ago. "Due to the global coronavirus, the corporation's business has also been adversely affected, and the corporation has sent a request letter to the Employee Provident Fund (EPF) and the Citizen Investment Fund (CIF) to assist by waiving interest, damages and penalties for the affected period and facilitating the payment of debt obligations by increasing the number of installments," the statement read.
The EPF manages the long term savings and pension of government, public enterprises and private sector employees as well a providing some social security benefits to the contributors. The CIF, a.k.a. the Citizen Investment Trust (Nagarik Lagani Kosh) operates and manages various types of retirement schemes, unit schemes, and mutual fund programs for both domestic and foreign investors. Both are government owned, as is Nepal Airlines, and as recently reported in ch-aviation, the Nepali government has a longstanding practice of using the provident funds as lending institutions to other state-owned entities, including Nepal Airlines.
According to the Nepal Airlines statement, the NAC has made loan repayments to the CIF and EPF of NPR2.94 billion Nepali rupees (USD22.5 million dollars) since June 2022, although the statement did not disclose the number of loans involved, the total amount owed, or what portion of the repayments covered interest and other penalties. There was also no mention of the number of additional installment periods requested. It was also recently reported that Nepal Airlines had made no repayments on one 2017 loan from EPF for NPR12 billion (USD91.6 million) and that the provident fund had moved to capitalize the interest.
According to ch-aviation PRO airlines data, Nepal Airlines has six aircraft in service, including two DHC-6-300s, two A320-200s, and two A330-200s. The airline presently only operates international sectors and flies from Kathmandu to Bangkok Suvarnabhumi, Bengaluru International, Delhi International, Doha Hamad International, Dubai International, Hong Kong International, Kuala Lumpur International, Mumbai International, Riyadh, and Tokyo Narita. In its statement, the NAC said its business (and revenues) were gradually improving while the EPF and CIF were reportedly considering the waiver request. The NAC has not responded to ch-aviation's request for comment.
