International Airlines Group (IAG) has confirmed two financing agreements that British Airways (BA) has reached that will increase total liquidity by £2.45bn. 

In a statement Steve Gunning, chief financial officer, says that IAG continues to explore other debt initiatives to improve further its liquidity.

On 31 December 2020, IAG announced that BA had received commitments for a five-year Export Development Guarantee term-loan of £2bn underwritten by a syndicate of banks, partially guaranteed by UK Export Finance (UKEF). BA has now reached final agreement with UKEF and the lenders.

BA has also reached agreement with the Trustees of New Airways Pension Scheme (NAPS) to defer £450m of pension deficit contributions due between October 2020 and September 2021.

Repayment of £450m accumulated contributions plus interest will be added to the end of the existing Recovery Plan, as monthly payments under a revised Recovery Plan, which is currently planned for March 2023.

No dividends will be paid by BA to IAG before the end of 2023. From 2024, any dividends paid will be matched by contributions to NAPS of 50% of the value of dividends paid. Any such payments to NAPS will reduce the outstanding repayment balance and are capped at that level. The requirement to make such payments to NAPS ceases after deferred contributions have been repaid.

Also see IAG results in this week's BTN.

www.ba.com

www.iairgroup.com