Kathmandu, April 19
Nepal’s national flag carrier NAC has stopped servicing the debt it raised to finance the procurement of two wide-body jets.
After the NAC stopped servicing its debt, lenders Citizen’s Investment Trust and Employees’ Provident Fund approached the government to secure the repayment of their loan. The Ministry of Culture, Tourism and Civil Aviation is learnt to have discussed the issue with representatives from the NAC and the funds.
According to sources, NAC officials say that they are not in a position to service the debt. They are demanding that the government provide a grant of Rs 20 billion to the company if it wants the NAC to stay afloat. The NAC still owes the Employees’ Provident Fund Rs 1.12 billion and the CIT around half a billion.
Ministry Joint Secretary Suresh Acharya said that the NAC is facing a cash flow problem. “We have told the management to introduce reforms, cut down on unnecessary expenses,” he said. “If the problem persists, the government might lend some money to the NAC or provide cash in return for equity,” he aded.
