Air India floats tender for loan upto Rs 3,460 crore to buy planes for VVIPs

Mangalore Today News Network

New Delhi, Nov 06, 2017 : At the verge of privatisation while battling a Rs 52,000 crore debt, the Maharaja of skies, Air India still refuses to bow down.

 

Air India just floated a tender to bridge the finance gap- for acquiring three aircraft, whose combined cost stands at Rs 3,460 crore.

This comes at a time, when it received Rs 24,745 crore of the Rs 31,000 equity infusion for a turnaround plan till 2021 from the UPA government.

The three B777-300 ER planes are scheduled to roll in by February 2018, out of which two will be pressed into service to ferry VVIPs. "These planes will be modified and join the fleet of aircraft that are used by President of India, Vice President and Prime Minister," a senior Air India official said.

An Air India spokesperson said, "Air India had placed an order with Boeing for 68 aircraft in 2005. These B777-300ER airplanes are the last of the three aircraft to be delivered. They will be delivered in January-February 2018 by Boeing..."

Less than three weeks ago, the original tender floated by Air India was for a loan of $555 million. But now the national carrier for which the government is likely to appoint a "transaction advisor" has reduced the loan amount to $535 million, $20 million lesser than the original.

WHY NOW?

Air India as per the purchase agreement with Boeing is to buy 15 B777-300 ER aircraft in all. It has already taken delivery of 12 such planes. The deals ran into a controversy due to allegations of kickbacks and are currently being probed by the CBI.

It’s surprising that the NDA government which has been critical of the deal due to the kickback charges had given the go ahead for the tender.

According to the revised tender document, one term sheet would be for two aircraft that are to be delivered in January next year and the loan amount required is up to USD 400 million.

For the remaining aircraft, a separate term sheet would be inked for a loan of up to USD 135 million.

The airline did not provide any specific reasons for revising downwards the proposed loan amount to USD 535 million from USD 555 million.

"The facility should be a direct loan without the requirement for formation of a special purpose vehicle structure which requires title transfer," the tender document said.

Air India has said that the Government of India has indicated that they would issue its guarantee for the bridge financing of B777-300 ER aircraft for a period of 12 months or till the date the loan is refinanced whichever is earlier.

No commitment fee would be paid to the bidder and that the "pre-payment/short closure of the bridge loan should be allowed without any extra cost" to the airline, it added.

The government is already planning to use the 115 aircraft strong fleet of the airline to cover part of its Rs 52,000 crore debt.


courtesy:Yahoo