Civil Aviation Minister Aiyaz Sayed-Khaiyum has clarified in Parliament the purpose of setting up the Waqavuka Financing Limited.

Civil Aviation Minister Aiyaz Sayed-Khaiyum has clarified in Parliament the purpose of setting up the Waqavuka Financing Limited.

This is after a surge of misinformation about the company from Opposition.

Sayed-Khaiyum says the company acts as a neutral third party.

He adds this is a requirement of the European Export Credit Agency – an institution that offers to finance domestic companies’ international export operations and other activities.

Waqavuka Financing Limited makes it easier to enforce security in the event our financial lease like Fiji Airways for example defaults in its repayment of loans.

“I do not know what sort of song and dance the opposition is making about it. So it’s a special purpose company that was actually set up to hold the title of the aircraft whilst the loan is being repaid. The shares, ownership of this special purpose company is held by a security agent acting on behalf of the Export Credit Agency (ECA) and the consortium of banks. Once the loan is been fully paid the ownership of the special purpose company and the title of the aircraft is transferred back to the airline which is Fiji Airways in this particular case.”

The Minister says the support from the ECA is important as without it the interest rate payable by Fiji Airways would be higher.

“Fiji Airways on a monthly basis when they do the loan repayments it comes into the company – the company simply disburses the repayment amount to the banks and that’s the arrangement.When the loan is paid off the special purpose company, the ownership of course will go to Fiji Airways and the ownership of the aircraft will go to Fiji Airways”.

Waqavuka Financing Limited was established in the 1990s when Fiji Airways purchased the Boeing 737 and was asked to set up the special purpose company.