Cathay Pacific given extension to draw down $1b govt loan

Cathay Pacific said Tuesday that the Hong Kong government had agreed to extend the drawdown period for a HK$7.8b ($1.01b) loan facility by a year to June 2022, giving it more flexibility to manage liquidity. The bridge loan was part of a $5b rescue package led by the Hong Kong government and Cathay's major shareholders Swire Pacific Ltd and Air China Ltd last year to help the airline weather the COVID-19 crisis. Cathay CE Augustus Tang said the airline had not yet drawn down on the loan as it adopted a suite of measures to save cash, but the extension would give it more flexibility to manage its liquidity position. Cathay had HK$28b of liquidity as of December 2020 and also raised HK$6.74b from a convertible bond issue in February and $650m in a bond issue last month. The airline's move to access as much liquidity as possible at a time when passenger numbers are down by more than 99% from 2019 levels follows a decision by rival Singapore Airlines Ltd last month to issue S$6.2b ($4.69b) of convertible bonds. The Singapore Airlines convertible bonds, underwritten by majority shareholder Temasek Holdings, were an optional part of a state investor-led S$15b rescue package announced last year.<br/>