Simrik Air leases entire fleet of Agni Air

Simrik Airlines from today officially started operations to Lukla with 17-seater Dornier 228 aircraft leased from Agni Air as it has leased the entire fleet of five aircraft from the debt ridden Agni Air.

"Simrik Airlines leased five aircraft of Agni Air after signing a tripartite five-year lease agreement between Agni Air, Simrik Airlines and a consortium of banks led by Grand Bank Nepal,” said executive director of Simrik Airlines Captain Rameshwor Thapa, without giving any details of the lease agreement.

The initiative might help Agni Air revive and prevent it from complete collapse as Simrik Airlines is now liable to repay loans worth Rs 570 million with interest borrowed by Agni Air from Grand Bank. Simrik will also have to repay loans of Rs 150 million to Rs 200 million acquired under consortium financing from two other financial institutions.
According to the agreement, Simrik Air will have to share the profit earned through the operation of the leased aircraft with Agni Air that had started for looking potential buyers after it suffered from worsening financial health due to huge bank loans and staff payment dues.

Grand Bank, along with Sunrise Bank and International Leasing and Finance Company, had financed Agni Air but the airlines failed to repay loans worth more than Rs 600 million to the banks due to the airlines key promoter Sudhir Basnet's huge real estate exposure.

Simrik Airlines will operate Agni's another Dornier aircraft after three months and in next three months, the company plans to operate all the three remaining Jet Stream aircraft, according to the agreement that stated that once the lease agreement expires, the aircraft will be returned to Agni Air.

Though the aviation market has high demand of aircraft, the domestic airlines have not been able to fulfill it,” said chief executive of Grand Bank Sudhir Babu Khatri. He hoped that the lease agreement will create a win-win situation for both the banks and the airlines.
Agni Air had started operations in 2006 with three Jet Stream and two Dornier aircraft, whereas Simrik Airlines had started regular flights with Beechcraft 1900 in February 2013.
At present, Simrik operates flights on Pokhara, Bhairahawa, and Simara routes and with today leased Dornier 228 aircraft it has extended flights on Lukla route, whereas Agni grounded all its aircraft after its failure to pay bank loan.

Namaste Air ready to take off

Namaste Air — a new domestic airlines — is ready to start its operation within this fiscal year.

"Namaste Air signed an agreement today with Agni Air to start flights with Agni's aircraft," said executive chairman of Namaste Air Raju Khatri.

Namaste Air has agreed to acquire Agni Air's two Dornier aircraft — in the first phase — to start its domestic operations, he said, adding that the airlines will also operate Agni's three Jetstream aircraft — in the second phase — from a month after its operations.

"From October, the airlines will have its own fleet of ATR 72-500 aircraft to operate," he added.

"Namaste Air has completed all the legal, technical and financial arrangements for its operations," said Khatri, adding that the airlines will fly to Pokhara, Bhadrapur, Biratnagar, Nepalgunj, Bhairahawa, Jomsom, Lukla, Dhangadi and Bharatpur, besides mountain flights.

The grounded Agni Air that has been in trouble due to its key promoter Sudhir Basnet's downfall in the real estate business has agreed to hand over its five aircraft — two Dornier and three Jetstream — to Namaste Air.

Agni Air had posted around Rs 280 million profit in the last fiscal year but the bubble burst in the real estate business has pushed its promoter Basnet to bankruptcy leading to the grounding of Agni's aircraft. Agni had around seven per cent share in the domestic air traffic while it was flying.

Earlier, Simrik Air had acquired Guna Air as the later was also in troubled waters.

Around seven airlines, including Nepal Airlines, are flying in the domestic sky that was opened after the liberal sky policy post-1990 movement.

At present, Civil Aviation Authority of Nepal has issued Air Operator Certificate (AOC) to 19 airlines, though all of them have not yet started operations.

CIB blacklists troubled Oriental Builders and Developers

The Credit Information Bureau (CIB) blacklisted cash-strapped Oriental Builders and Developers yesterday, tightening the noose around Sudhir Basnet, the chairperson of Oriental Group.

This is probably the last blow to Basnet, whose various projects were building 70 independent houses and 1,700 apartments. He is said to have a liability of Rs three billion.

Basnet has been blacklisted by Credit Information Bureau as he has been unable to pay back bank loans.

Besides troubled housing and apartment projects like Oriental Builders and Developers, and Kohinoor Housing, he has to pay billions to depositors of Oriental Savings and Credit Cooperative, who have been left with no solution after his arrest on January 4. Kohinoor Hills, another project of Basnet, who is currently in police custody, was already blacklisted by CIB.

Basnet had invested money collected from depositors of Oriental Cooperative in housing projects by violating cooperatives regulations.

Basnet, who is currently facing multiple problems in his realty business, cooperatives and airlines, has been blamed for delaying the handing over of apartments and houses under his housing projects.

Oriental Savings and Credit Cooperative owes Rs 3.89 billion to over 7,000 depositors, whereas his debt-ridden Agni Air was put up for auction by a consortium of banks that had financed the airlines for failing to repay loans.

Though the consortium of banks — Grand Bank, Sunrise Bank and International Leasing and Finance Company that have lent Rs 650 million to Agni Air — had issued a seven-day auction notice for the sale of Agni’s five aircraft — three Jetstream 41s and two Dorniers — spare parts and land plots in Bhaktapur, the court has stayed the sale, and officials of the airlines and some tourism entrepreneurs have planned to revive the company after seeking additional loans of around Rs 250 million from the consortium.

Earlier, he was also planning to sell Vegas City housing project at Imadol, Lalitpur, as creditors were forcing him to pay their deposits. Kohinoor Hill Housing had launched the Vegas City project in 2009. Kohinoor had promised to hand over the property in two to three years but the construction process took long due to lack of cash flow. A total of 268 people had booked apartments and some two dozen have booked independent homes at Vegas City paying Rs 830 million.

Basnet had also tried to sell Imperial Apartments at Naxal, Kathmandu, to pay depositors of Oriental Cooperative.

Police arrests Sudhir Basnet

Police today evening arrested builder and Agni Air promoter Sudhir Basnet on charges of fraud.
"We have arrested Basnet from Tinkune in Kathmandu on complaints from his nine clients, whom he promised flats in his apartments being promoted by him," confirmed a police officer from Metropolitan Police Crime Division, Hanuman Dhoka.
Basnet, who had promised flats to around 1,000 people in 10 of his housing projects like Oriental Apartments, Kohinoor Housing  and Eastern Apartments, was unable to deliver due to slowdown in housing business and lack of cash flow to complete construction of the apartments.
Basnet, who had also been blacklisted by the Credit Information Bureau (CIB) as he was unable to pay loan to the banks, also have to pay over billions to Oriental Cooperatives' depositors, who have been making rounds of his office since last couple of months.
He had invested depositors’ money from Oriental Cooperatives to the housing projects against the cooperatives and central bank's banking regulation.
Likewise, three banks and financial institutions have yesterday put Agni Air, owned by him, for auction as the airlines failed to meet the loan repayment deadline that was December end. They issued a seven-day auction notice yesterday for the sale of Agni Air’s five aircraft — three Jetstream 41s and two Dorniers — their spare parts and land plots in Bhaktapur.
Grand Bank, Sunrise Bank and International Leasing and Finance Company have lent the airlines Rs 650 million. But it failed to repay loan by deadline.

Basnet has however, around Rs 4 billion loan from different banks and financial institutions.