AI in sale-and-lease deal with Europe bank

Mumbai: For the first time in its history, state-run carrier Air-India will sell its six Airbus A310-300 aircraft to a European bank and lease them back to its fleet for operations, in a sale-and-lease back deal. This is a first of its kind for the state-owned company.
Sale-and-lease back deals have been generally executed by private carriers to provide for cash upfront to meet their working capital requirements.
Sources close to the development said leading UK-based aircraft funding bank Investec has proposed to purchase six A310-300 aircraft for nearly $80 million (nearly Rs 350 crore) and lease them back for a rental of $2,47,000 each a month over 60 months.
The cost of the aircraft in the books of Air-India is nil due to depreciation.
Air-India Executive Director (Finance) S Venkat confirmed the development but declined to divulge further details.
Sources said the sale-and-lease back could be extended to five more years on mutually agreed terms. This would be in addition to the current duration of three to five years.
21/03/07 P R Sanjai/Business Standard

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Categories: Air India Mar 2007, Foreign Mar 2007, New Mar 2007