Export-Import bank of US clears AI's proposal

Mumbai, Oct 9: Export-Import Bank of the United States has cleared Air India's loan proposal for the acquisition of 68 Boeing aircraft from M/s Boeing Commercial Airplane Company with US Exim support.

Air India had signed an agreement with M/s Boeing company in December, last year, for the acquisition of 68 aircraft including 18 for its subsidiary company Air India Charters Limited. This clearance provides for a final commitment in respect of 17 aircraft and engines to be delivered from November 06 to December 2007, which includes 10 aircraft for Air India Express and seven aircraft for Air India and a preliminary commitment in respect of the remaining 51 aircraft to be delivered between January 2008 upto February 2012, a release issued to BSE here said.

Exim Bank of United States would guarantee the loan upto 85 per cent of the aircraft cost and the balance 15 per cent would be funded through commercial borrowings. Air India had invited applications to finance the delivery payments and the final commitments in respect of 17 aircraft and M/s ABN Amro has been mandated to lead finance the funding supported by US Exim.

The balance 15 per cent would be funded by Indian commercial banks viz, State Bank of India and ICICI Bank.

The Exim portion, which will include airframes and engines, will be amortized over a period of 12 years whereas the commercial portion in a period of five years from the date of drawal of loans.

The approval follows meetings by the Air India team led by V Thulasidas, CMD, Air India with the top brass of US Exim in the first week of August 2006 wherein a detailed presentation was given to the US Exim by S Punhani, Director Finance, on Air India's future expansion plans and growth.

The Government of India would in turn provide a guarantee for 85 per cent of the loan guaranteed by the US Exim Bank. The structuring of the deal is presently being done by Air India in consultation with Exim Bank and the lenders. This financing is the largest transaction done in aviation history out of India supported by US Exim Bank.

The first aircraft is expected to be delivered by the third week of November 2006 to Air India Express followed by delivery of the remaining 16 aircraft by December 2007 including four B777-200LR and three B777-300ER fitted with GE engines, the release added.

UNI