Emirates signs $750mn revenue-backed loan
Emirates (EK, Dubai Int’l) has signed a USD750 million five-year dual-tranche financing facility with Emirates NBD, a Dubai government-owned bank which is one of the biggest banking groups in the Middle East.
The bank said in a statement released on October 5 that the “sales-receivable backed financing structure” agreement, which had been signed on September 30, was “competitively priced” and was “aimed at diversifying [the airline’s] liquidity pool.” Revenue-based financing is a means of raising capital by pledging part of future revenues in exchange for money invested. Emirates has confirmed that it signed the financing facility.
The state-owned carrier has already received USD3.1 billion in Dubai government support since the start of the pandemic, via equity injections in exchange for stock rights, namely USD2 billion in 2020 and then USD1.1 billion in June 2021 as it posted a USD5.5 billion loss for the year ending March 31, its first annual loss in 32 years.
Emirates said at the time that Dubai would continue to support the company, which has helped to transform the city in the United Arab Emirates over three decades into a major international aviation hub. Dubai hopes to attract millions of visitors over the next six months to Expo 2020, a world fair that opened belatedly due to the pandemic on October 1 and will remain open until March 31, 2022.
“This first-of-its-kind transaction demonstrates Emirates NBD Group’s commitment towards supporting Emirates, the largest airline in the region. […] As Dubai gears up to be the most visited city by 2025, we look forward to playing our part in achieving this goal through more of such landmark transactions with Emirates Airline,” Ahmed Al Qassim, the bank’s head of corporate and institutional banking, said in the statement.
According to the ch-aviation fleets advanced module, Emirates currently operates a fleet of 263 aircraft, including 119 A380-800s, the majority of which have been grounded, along with 124 B777-300(ER)s, ten B777-200(LR)s, and ten B777-Fs.