The Hindu Business Line : Air India to complete raising $400 million soon

The airline has received three bids from global players for the sale and lease back arrangement, and they have been called to Mumbai next week to conclude the agreement. “One of the offers that have been received is above the reserve price that the airline had quoted. Many parties responded to our offer but we are considering only three as several offers were received after the closing date,” sources told Business Line.

The airline has sought sale-and-lease back offers from lessors and bankers for four Boeing 747-400 and six Airbus A-320 aircraft. The airline has set a reserve price of $65 million for three Boeing 747, which were made in 1993, and $70 million for the single Boeing 747-400, which was inducted in 1994. In addition, it is seeking $25 million per aircraft for the Airbus A-320 aircraft.

The funds raised through the sale-and-lease back route would be used not only to meet long-term working capital requirements but also meet the pre-delivery payments for new aircraft being inducted.

National Aviation Company of India Ltd has ordered more than 110 aircraft from both Airbus and Boeing at an estimated cost of more than Rs 35,000 crore. The sale-and-lease back arrangement is considered as a cheaper alternative for raising funds.

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