LAL gets refinancing

  • 2003-11-20
  • Baltic Business News
VILNIUS - Nordea Lithuania said it would refinance the $7.5 million loan to Lithuanian Airlines (LAL) under more favorable conditions.

The refinancing will allow the airline to save 1.1 million litas (325 million euros) by 2007, which the company will invest in development and working capital.
In 2000, LAL took a bank loan with the state guarantee from the former Industrial Bank (now Parex Bank). The net interest margin paid to Parex was 2.85 percent, while the margin given by the Lithuanian branch of Nordea Bank Finland will be 0.29 percent.
"It is one of the most inexpensive loans on the Lithuanian market, reflecting both the bank's attitude toward the prospects of LAL as well as the overall assessment of the country's economy," said Giedrius Voveris, head of the bank's corporate customers department.
"Nordea intends to continue its active cooperation with the airline and contribute to the implementation of its development projects," he added.
During the first 9 months this year, LAL flew 216,000 passengers, an increase of 10.7 percent over the comparable period last year. In the first six months this year, its net losses amounted to 3.7 million litas, yet it plans to recover and make a profit of LTL 2.2 million in 2003.