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Gulf Air Signs Credit Agreement

Gulf Air and Bank Muscat International “BMI” have signed an agreement covering the provision of credit facilities by BMI to the airline. In terms of the agreement, which was signed at Gulf Air’s headquarters in Bahrain, Bank Muscat International “BMI” will provide a short-term loan valued at USD7.5 m to the airline. This bridging finance, initially for a period of one year, maybe rolled over at the bank’s discretion.
“While we are in good shape financially and have met our 2004 financial objectives in terms of Project Falcon, 2005 is a completely new proposition,” said James Hogan, Gulf Air’s President and Chief Executive. “Restructuring is an ongoing process, added to which we have the more pressing challenges in the form of strong regional competition and the high fuel price.”

“Recent IATA and industry predictions point to losses in the region of USD5.5 billion if the fuel price remains at present levels”, he said, “We are therefore taking all appropriate measures to ensure that we can meet our objectives and sustain the performance we achieved last year within this difficult environment.”

Signing on behalf of Bank Muscat International (BMI), its Chief Executive Officer, Musallam Al-Shukairi said: “We are delighted to have concluded this agreement. Like Gulf Air, which plays a vital role in the economic infrastructure of the Middle East, we, at BMI, are committed to the economic stability and growth of the region and look forward to other opportunities for collaboration.”

“BMI’s strategy is focused on expanding in MENA region in the coming years and is committed to partnering the region in realizing its potential,” he added, “BMI plans to strengthen its regional presence in the near future by expanding its network. In addition to Corporate Banking, our key strategic business units are Retail Banking, Private Banking, Treasury, Islamic Banking Services and Global Trade Services. This relationship with Gulf Air illustrates our mutually synergistic focus on the region.”