Taiwanese Cathay United Bank (CUB) and PetroVietnam Finance Joint Stock Corp (PVF) have signed a credit contract in Hanoi to lend $7.22 million to the national flag carrier Vietnam Airlines.

Under the contract, Vietnam Airlines (VNA) will receive the 7-year credit worth up to $7.225 million from two financial institutions to purchase backup engines for Airbus 321 airplanes.

The purchase is a part of the VNA's project to invest in 10 new A321 aircraft which is expected to help the firm take initiative in operating its flights, maintaining service quality and ensuring business stability, according to the Vietnam News Agency.

CUB will be the main financer, while PVFC will be the agency to arrange capital and manage secured assets.

As planned, VNA will expand its fleet to 115 planes by 2015 and 170 by 2020, mainly with aircrafts of the following types: Boeing 777; Airbus A330, A321, A320, A350 XWB; and Boeing 787-9.

The new airplanes are said to be technologically advanced, fuel efficient and eco-friendly.

In May last year, VNA received a loan of more than $7 million from the Ocean Bank to buy standby engines made by the International Aero Engine AG for Airbus 321.

CUB, former United World Chinese Commercial Bank, was established in 1975.

Till the end of 2010, total assets of CUB reached more than 1.600 trillion Taiwanese dollars (around $55 billion); its pre-tax profit was posted at $436 million.

Source: Tuoitrenews