The Hindu Business Line : IA going for syndicated ECB to fund aircraft buys

Indian Airlines has announced that it is going in for a syndicated external commercial borrowing of $152 million to fund aircraft acquisition. ICICI Bank would act as a sole arranger and underwriter.

The airline has signed a memorandum of understanding (MOU) with ICICI Bank for funding of the pre-delivery advance payments (PDP) for acquisition of aircraft. The funding arrangement would be spread over from June 2006 to January 2010.

In February 2006, Indian Airlines had signed an agreement with Airbus Industrie for the purchase of 43 Airbus A320 family aircraft - comprising 19 A-319, 4 A-320 and 20 A-321 - at an estimated cost of $2 billion.

"The signing of this MOU (with ICICI Bank) is a significant step forward in the tie-up of funding for the aircraft acquisition programme.

This acquisition will allow Indian Airlines to step up growth, expand its market and further improve the quality of the products offered besides replacing some of its existing Boeing 737 and Airbus A300 aircraft," the airline said in a news release.

ICICI Bank was short-listed in a competitive bidding process where several nationalised, private sector and foreign banks participated.

"Going forward Indian Airlines would tie up long-term funds with the support of European Export Credit Agencies to complete the acquisition process," the news release said.

In addition to PDP funding, ICICI Bank has also agreed to provide assistance in applying to ECA for tie-up of long-term funds with ECA comfort, the airline said.

More Stories on : Airlines | Overseas Borrowings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Akshaya Tritiya spells gold rush for banks

Social security funds - need of the hour

Cellphones may rock MP3 player sales

Bharti keen to offer services in Gabon

IA going for syndicated ECB to fund aircraft buys

Duty exemption allowed under new import authorisation scheme

Indo-Pak grey market trade worth $965 m in 2005-06: Study

IT/ITES driving realty, telecom, hospitality sectors

Myanmar gas: India works out route bypassing Bangladesh

Revised norms dim rural electrification

Fate of UP sugar policy hangs in balance

Momentum to continue