Tuesday, August 8, 2017
Air India to Buy Six Boeing 787 Dreamliners By Raising $740 Million
The government may be looking at disinvesting Air India, but the flag carrier is going ahead with its fleet expansion plans and looking for interim financing worth $740 million (around Rs 4,720 crore) for buying six 787 Dreamliners.
The airline has invited offers from from banks and financial institutions to arrange bridge financing for the amount for 15 months to buy these Boeing planes. This could mean that a single plane could cost $123.3 million.
Earlier in March, Air India had sought $470 million or around Rs 3,100 crore from banks and financial institutions to buy four Dreamliners from Boeing. Of the six, three aircraft have been delivered, while the rest would be delivered by October. No government guarantee was given for the three aircraft which were delivered already.
The government has now indicated that they would issue guarantee for all the six aircraft and Air India is looking at refinancing the bridge loan for the three delivered planes, and interim bridge financing for the rest for a period of 15 months.
“In addition to the government guarantee, Air India will offer the aircraft as security. 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, issued last Friday, said.
“Air India would prefer to have a bullet repayment for this facility or a suitable moratorium period for payment of principal amount under this facility. The bidder with the lower all in costs would be selected,” it said.
As part of fleet expansion plan, in 2006, Air India had placed orders with Boeing for 68 aircraft -- 27 Dreamliners, 15 777-300ERs, eight 777-200LRs and 18 737-800s.