Cathay Pacific Seeks US$300 Million for New Aircraft
By Alman Loong, The Standard | Feb. 10, 2007
Cathay Pacific Airways is seeking a five-year syndicated loan of US$300 million (HK$2.34 billion) to finance increasing capital expenditures.
On Feb. 9, bankers said the loan could be in US or Hong Kong dollars. Cathay is looking to pay 24 basis points over either the London or the Hong Kong interbank offered rate, depending on the loan currency.
The arrangers, the corporate banking arms of Mizuho Financial Group and Sumitomo Mitsui Financial Group, are asking other lenders to join the syndicate and provide between US$10 million and US$50 million each.
The deal will close March 8, Dow Jones Newswires reported, citing a banking source. A spokesman for Cathay declined to comment.
Cathay is increasing capital spending on new aircraft and new product refurbishment. It expects to have 125 planes in its fleet by 2010.
It plans to spend at least HK$9.5 billion in the next two years, and a minimum of HK$10 billion in 2009, to improve its capacity, chief operating officer Tony Tyler said last month.
With a passenger load factor of 79.9 percent last year, he said there would only be enough room to accommodate 5 percent growth in capacity this year.
"At present, there is something of a long-haul bottleneck because it is hard to increase load factors. But the long-haul share of capacity will increase after we take delivery of new Boeing 747s and our 777 ERs."
Cathay also wants to position itself as Asia's No 1 combined passenger and cargo carrier by acquiring new freighters after 2009.