Gulf Air and Standard Chartered Bank finalize terms of a three-year syndicated term loan facility of US$ 75 million

Travel News Asia 27 December 2005

Gulf Air and Standard Chartered Bank (SCB) have finalized the terms for the provision of a three-year syndicated term loan facility of US$ 75 million that will be used to finance the airline's ongoing investment and growth in the New Year. The deal is expected to be signed in early January.

In terms of the agreement, Standard Chartered Bank, acting as the arranger and agent for the consortium of lenders, which includes seven banks, will extend credit facilities valued at US$ 75 million to the airline. The loan is repayable over a period of three years. 

In formulating its new ten-year strategy, the airline identified a requirement for further credit facilities that will allow it to maintain the momentum of the growth and change achieved during the implementation of its three-year restructuring programme, Project Falcon.

Despite significant challenges from fuel and competition within the region, we have made positive progress re-engineering our business, said James Hogan, Gulf Airs President and Chief Executive. Abu Dhabis withdrawal has necessitated a rethink of our strategy around a two-hub approach. This will require changes to our network, routes, fleet, and allocation of resources. 

This means that we have to keep investing in the core areas of our business. In some areas, consolidation and traditional style cut backs will be necessary, but in principle we are confident that we can build on what we have achieved to date and this will require a bold, progressive strategy underscored by significant investment. 

In 2006, Gulf Airs investment will be most visible in the airlines state-of-the-art simulator centre, which will be opened in the first quarter of the year. The airline has also signed an agreement for the provision and installation of new First and Business Class seats in its Airbus A340 aircraft and the simultaneous refurbishment of the aircraft interiors. Gulf Air will also install new in-flight entertainment systems during the year.

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