Etihad Airways and the New York-based banking group Citi have signed a finance agreement that will allow the Abu Dhabi airline to pay select suppliers earlier than usual.
The arrangement, the financial details of which were not disclosed, is the first of its kind for Etihad and Citi’s operation in Abu Dhabi, the companies said. The suppliers that will benefit from the deal were not named.
The financing will be rolled out in two phases, the companies said.
Typically a supplier to industries will be promised payment within a 30 to 60-day window. Under the deal announced yesterday, Etihad will speed up the payments through Citi.
“Our suppliers are an essential part of the success of our business and we are happy to provide the tools that offer new credit and liquidity sources and accelerate their access to cash flow,” said James Rigney, the chief financial officer at Etihad.
“This project is a great example of how we can work together with Citi to improve access to finance for our suppliers and encourage their development in the region to build a sustainable and vibrant economy”.
The government of the UAE has urged businesses in recent years to take more supplies from small and medium-sized enterprises, a task that has become more urgent as the price of oil plunges and the country becomes more reliant on economic activity that is not dependent on crude. Since last June, the price of oil has dropped by more than 50 per cent.
mkassem@thenational.ae
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