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(Alliance News) - International Consolidated Airlines Group SA on Thursday said British Airways has received a GBP2.0 billion loan facility guaranteed by UK Export Finance, which it expects to drawdown during January.
UKEF is the UK's export credit agency and provides an export development guarantee to support the working capital and capital expenditure needs of UK exporters that meet set criteria.
The airline holding group that operates in Ireland, Spain and the UK said the five-year loan facility for BA is underwritten by a syndicate of banks and includes restrictions on dividend payments by BA back to IAG.
IAG said proceeds from the facility will be used to "enhance liquidity and provide British Airways with the operational and strategic flexibility to take advantage of a partial recovery in demand for air travel in 2021 as Covid-19 vaccines are distributed worldwide".
The group as a whole has cash and undrawn facilities of EUR8.00 billion, excluding the new facility.
In addition, IAG said it plans to reduce its board to 11 directors in January as part of EU ownership and control rules, resulting in there being a majority of independent EU non-executive directors on its board. This is due to IAG setting the maximum number of its shares that can be held by non-EU nationals at 47.5%, which following Brexit now includes UK shareholders.
Chair Antonio Vazquez, who is due to retire in January, said: "It is disappointing that it has become necessary to make these changes to the board. However, we are pleased that the EU-UK Trade & Cooperation Agreement recognises the potential benefits of further liberalisation of airline ownership and control because we believe that it is in the best interests of the industry and consumers."
Looking ahead, IAG said it is well placed to take advantage of "partial recovery" in air travel demand in 2021 following the Covid-19 pandemic.
IAG shares closed down 4.5% at 159.80 pence in London on Thursday.
By Zoe Wickens; zoewickens@alliancenews.com
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