LONDON: British Airways has signed an agreement with the UK government for a £1 billion loan. The deal, with UK Export Finance (UKEF) and a syndicate of banks, was confirmed by the owner International Airlines Group (IAG) earlier.
It will take the form of a five-year export development guarantee committed credit facility (UKEF Facility). The cash comes in addition to a £2 billion UKEF guaranteed facility that was announced in December last year and drawn in March.
“British Airways intends to draw down only if and when required and the facility will not be utilized upon signing,” a statement explained.
Similar to the previous facility, British Airways is entitled to repay any drawn loan at any time on notice and there are similar non-financial covenants, including restrictions on dividend payments to IAG.
At the end of September, IAG said it had a total of €10.6 billion.
The group, which also includes Aer Lingus and Iberia will update investors and analysts in its third-quarter results announcement on November 5th.
