Air India to lift $1bn from JPMorgan, leverage property
15 Jul 2009
Mumbai: State-owned National Aviation Co of India Ltd (NACIL), the operator of Air India, is set to raise about $1 billion (around Rs4,870 crore) in the form of an 11-year loan from JPMorgan Chase and Co to fund the purchase of 10 Boeing Co aircraft - part of a larger order of 68 aircraft.
The loan will be guaranteed by the US Export-Import Bank and is likely to help the struggling carrier save about $1 million a month in interest costs.
Nacil, a entity formed after merging domestic carrier Indian Airlines and international operator Air India, has announced it will, very likely, post record losses of Rs5,000 crore for fiscal 2008-09.
According to sources in the ministry of civil aviation, Nacil had floated a tender to raise $1.06 billion to buy 10 Boeing planes and is now being offered the loan by JPMorgan at attractive terms.
The US ExIm Bank, the US government's trade financing arm, typically offers loans at rates cheaper than external commercial borrowings raised from the market. The US ExIm Bank offers guarantees for loans used to purchase goods or machinery from the US, based on a counter-guarantee by the local government.
The loan will be used to finance purchase of three Boeing 777-200 and four 777-300 planes for its international operations, as well as three 737-800 planes for domestic routes.
.webp)
