State-owned carrier Air India has reduced its aircraft-related loans by `6,000 crore, which now stand at `14,000 crore against `20,000 crore at the end of FY16. Airline officials told FE that the airline paid back `6,000 crore of bridge loans recently from the proceeds of sale and lease-back of its nine Dreamliner aircraft, which was conducted at the end of August.
This is the first sale and lease back transaction of Air India without the guarantee of US Export and Import Bank.
The transaction was carried with the guarantee from the government of India and attracted an internal rate of return below 3% due to the improving financials of the company.
The participants in the transaction were Deutsche Bank, Bank of India, Export Import Bank of India and Industrial and Commercial Bank of China (ICBC). “We are happy that this was the first transaction of Air India with the participation of the EXIM bank of India and without the presence of the EXIM bank of United States. Our aircraft related debt will come down but the aircraft rentals will increase as a result of the sale and lease back,” a senior AI official said.
In an another major development, around 10 days back AI conducted the sale and lease back of two more of it Dreamliner for `22.5 crore which was mandated by the First Gulf Bank. This was for the first time that an investment bank from the Gulf region financed the purchase of the aircraft. FE had first reported in July about AI’s plan to reduce its debt by the sale and lease back of its Dreamliner aircraft.
10/10/16 Malyaban Ghosh/The Financial Express
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This is the first sale and lease back transaction of Air India without the guarantee of US Export and Import Bank.
The transaction was carried with the guarantee from the government of India and attracted an internal rate of return below 3% due to the improving financials of the company.
The participants in the transaction were Deutsche Bank, Bank of India, Export Import Bank of India and Industrial and Commercial Bank of China (ICBC). “We are happy that this was the first transaction of Air India with the participation of the EXIM bank of India and without the presence of the EXIM bank of United States. Our aircraft related debt will come down but the aircraft rentals will increase as a result of the sale and lease back,” a senior AI official said.
In an another major development, around 10 days back AI conducted the sale and lease back of two more of it Dreamliner for `22.5 crore which was mandated by the First Gulf Bank. This was for the first time that an investment bank from the Gulf region financed the purchase of the aircraft. FE had first reported in July about AI’s plan to reduce its debt by the sale and lease back of its Dreamliner aircraft.
10/10/16 Malyaban Ghosh/The Financial Express
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