Cathay Pacific has today welcomed the Hong Kong SAR Government's decision to extend the drawdown period of the HK $7.8 billion loan facility until June 8, 2023. The bridge loan was originally provided to the carrier as part of their June 9, 2020 HK $39 billion recapitalization.
On Tuesday (June 7, 2022), Cathay Pacific announced that the Hong Kong SAR Government has extended the drawdown period of the HK $7.8 billion bridge loan facility for an additional 12 months until June 8, 2023. The Government originally provided the facility to the airline as part of the company’s HK $39 billion recapitalization announced on June 9, 2020 due to the industry-wide turndown related to the onset of the global COVID-19 pandemic.
In today’s announcment, Cathay Pacific Group’s Chief Executive Officer, Augustus Tang, said,
“We are grateful to the Hong Kong SAR Government for its ongoing support, and its continued confidence in the long-term future of Cathay Pacific despite the short-term challenges of the pandemic. Since the beginning of the COVID-19 crisis, we have remained focused on prudent cash management. Despite the difficult operational environment, we have not had to draw down the facility over the past 12 months. The further extension of the drawdown period is greatly appreciated and will provide us with flexibility to manage our liquidity position.
“The unprecedented impact of the pandemic has necessitated some very difficult decisions, namely our restructuring in 2020, but through this and our recapitalisation, we have created a more efficient, more competitive and more focused business. We have already recommenced hiring as we plan for the anticipated recovery in Hong Kong and global aviation in the 18-24 month period ahead. As the Hong Kong’s home airline, we remain resolutely committed to keeping the Hong Kong hub safely and reliably connected just as we have for more than 75 years.”
At the end of 2021, Cathay Pacific Group’s liquidity stood at HK $30.3 billion, versus HK $28.6 billion at December 31, 2020. The carrier is currently adding back capacity and has targeted a cash burn reduction to less than HK $500 million per month over the next few months.
Source: Cathay Pacific