Ministry takes loan from British bank

22-11-2001

The Defence Ministry has taken a 5.8 billion crown loan to help pay off its debt to plane manufacturer Aero Vodochody from Britain's Standard Chartered Bank. The move solves the ministry's deficit of 4.1 billion crowns this year and 1.7 billion crowns deficit in 2002. The ministry will also deduct 250 million crowns of its payment to Aero as a default fine for late delivery.

Aero is expected to supply the army with 37 of a planned 72 fighters by the end of this year. The total cost of the project is placed at 50 billion crowns, or around 1.35 billion US dollars. The planes which the Czech airforce has received were grounded last week when technical faults were discovered. Meanwhile, it is reported that BAE Systems - Saab are interested in buying Aero Vodochody.