Gov’t to Issue Bonds to Pay Back Loans on Iran Air ATR Planes

EghtesadOnline: The government’s Economic Council last week approved a proposal of Minister of Roads and Urban Development Abbas Akhoundi, based on which the government is to issue 10 trillion rials ($70 million) worth of bonds and sukuk for financing Iran Air’s new plane orders.

News ID: ۷۴۶۰۵۸

26 September 2018

The measure was initially set to help the flag carrier prepare the down payment needed for purchasing ATR 72-600 aircraft. However, bonds are now going to be used for settling short-term loans taken out by Iran Air last month to take delivery of five ATR turboprops.

According to Asghar Fakhrieh-Kashan, an advisor to Akhoundi and senior negotiator of Iran Air’s plane deals, the bonds will no longer be used for purchasing new airplanes, ILNA reported.

“The down payment needed for taking delivery of the last batch of ATR planes (in mid-august) was provided by local banks as one-month loans … The bonds will be used for paying back the money to banks,” Financial Tribune quoted him as saying.

The comments come after some local media wondered whether Iran Air will receive more airplanes.

“As per the deal between Iran Air and ATR Aircraft, the Franco-Italian planemaker was required to deliver 20 planes … We have taken delivery of 13 jets so far … They need to find new customers as they cannot deliver the airplanes to Iran,” Fakhrieh-Kashan was quoted as saying.

Italy’s aerospace giant Leonardo SpA said earlier this month that ATR, which it co-owns with France’s Airbus SE, was in talks with alternative buyers for the remaining aircraft in a €1 billion ($1.6 billion) deal with Iran, which it can no longer deliver due to sanctions.

“We are pretty confident that we will finalize the reallocation to other countries” by the end of this year, Chief Executive Officer Alessandro Profumo said in an interview with Bloomberg TV at the Ambrosetti Forum in Cernobbio, Italy.

Thirteen new generation ATR 72-600 aircraft ordered by Iran in 2016 have already been delivered, while “eight remain and will be allocated elsewhere," Profumo said.

Iran’s flag carrier Iran Air has also received three brand new jets from Airbus to date.

The latest batch of ATR planes landed in Tehran’s Mehrabad International Airport on August 5.

Deliveries of ATR turboprops were halted in May after the United States, which must approve exports of planes containing over 10% US parts, withdrew from a 2015 international nuclear deal with Iran.

Although Washington announced a 90-day wind-down period for business conducted under the accord, aircraft deliveries halted after the US Treasury said it would revoke export licenses.