March 17: Nepal Airlines Corporation (NAC) had called on interested lenders on January 23 to submit proposals for providing the debt-ridden airlines company with a loan of Rs 135 billion. After no party submitted a proposal within the specified period, the NAC issued Expression of Interest (EOI) again.

The NAC issued the EOI again on last Wednesday after no partner, government or company proposed to give a loan within the specified period.

The NAC plans to pay the outstanding debt and buy new aircraft with the new loan.

According to the NAC, the new loan will mostly be utilized to buy new aircraft. The NAC requires an estimated loan of Rs 75 billion to buy new aircraft, Rs 55 billion to pay off the existing debt and Rs 5 billion to build the hangar.

According to NAC Spokesperson Ramesh Paudel, the debt of the company is now more than Rs 48 billion. The NAC’s debt liability for the purchase of four aircraft in 2015 and the interest on the loans alone stand almost Rs 50 billion.

The NAC, which is under severe pressure due to lack of capital, debt burden and lack of aircraft, is making an attempt to proceed ahead with the purchase of new aircraft by taking concessional loan, but the lender have do not trust the national flag carrier of Nepal.

The NAC t present has taken loans from the Employees' Provident Fund and Citizens' Investment Fund. The NAC has to pay more than a billion rupees annually in interest to these lenders.

According to the NAC officials, the state-owned airline company is seeking concessional loans to pay the current debts because the interest rates of EPF and CIT are quite high.

The report of the Structural and Managerial Study and Recommendation Committee of Nepal Airlines Corporation states that the accumulated total debt of the NAC in 2080 stands at Rs 48.3 billion. The corporation is paying interest at the rate of more than 10 percent of the total loan.