BASEL, Switzerland (AFP) - The cash-strapped airline Swiss said it had agreed on the terms for a crucial 325 million Swiss franc (210 million euros, 258 million dollars) credit facility with an international banking syndicate.
However, the company said in a statement that it had not secured the long awaited credit line itself and still needed to gain the consent of "various third parties", which it did not identify.
The banking syndicate led by Britain's Halifax Bank of Scotland (100 million Swiss francs) also includes Barclays Capital (100 million Swiss francs), Switzerland's Credit Suisse (75 million Swiss francs), UBS (75 million Swiss francs) and the Zurcher Kantonalbank (20 million Swiss francs).
Swiss had been seeking the credit line for more than year and had long regarded it as a key part of its attempt to raise its loss-making and cash- starved business back into profit.
"We are very pleased that we have been able to sign a term sheet for a credit facility with the banks involved, following intensive negotiations," said Swiss's chief executive Christoph Franz.
"We are confident that we will rapidly conclude the definitive credit agreement and, with a strengthened liquidity base, will then be able to implement the necessary steps to further strengthen our competitive position in the ever changing aviation market," he added.
Just weeks after a prospective agreement with the Oneworld alliance led by British Airways collapsed, Swiss said it had managed to cut its first-half net loss by about 90 percent to 33 million Swiss francs this year.
Despite a one-third cut in its fleet and staffing, it warned that spiralling fuel costs were hampering a turnaround despite increasing passenger travel.
The airline cut its losses by a third in 2003 to 687 million Swiss francs.
Franz, who was appointed in April, has forecast that the company would not break even this year.