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Tuesday, 19 October 2021

Egyptair gets House backing for FinMin guarantee of EGP 5 bn loan

Egyptair Holding Company will now be able to take out a long term, EGP 5 bn loan from state owned banks backed by the Finance Ministry after the House of Representatives approved a decision by the prime minister greenlighting a law that grants the finance minister the right to issue guarantees to the company for the loan, Al Masry Al Youm reports. The financing will be used to fulfill the company’s external and internal financial obligations, members of the Planning and Budgeting committee said. The law faced resistance from some MPs, who called into question the company’s ability to pay its large, and growing pile of debt.

The company had last year obtained a 10-year, EGP 3 bn loan from Banque Misr and Banque du Caire, after it sustained some EGP 3 bn in losses during the covid-19 induced grounding of global travel. The company’s foreign debt is probably in the EGP 13 bn range, based on earlier statements by EgyptAir holding company president Mohamed Zakria. EgyptAir had last year received an EGP 2 bn loan from the Finance Ministry that will see the government service the carrier’s debt until its operating capacity reaches 80% of levels achieved in 2019.

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