Air India seeks US$1.15 billion to refinance aircraft
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National Aviation Company of India Ltd. (NACIL), the parent company of Air India, is seeking loans of up to US$1.15 billion (INR5,314 crore) to refinance the purchase of 21 aircraft and related equipment. According to a statement posted on the company’s website, the move follows the purchase of 43 new Airbus A320 Family aircraft, comprising 19 A319s, four A320s and 20 A321s agreed for Indian Airlines, which has since merged with Air India under the NACIL umbrella.
Twenty-one of the aircraft, all of which have been delivered, were financed through a rupee equivalent US$1.15 billion loan from a consortium of Indian banks. NACIL now intends to refinance these 21 planes. NACIL is inviting offers for long-term loans, which will be guaranteed by the Indian government. Offer will be accepted up until 21 June 2010.
According to Bloomberg, NACIL is trying to cut expenses after the government ordered the company to improve its operations to win further financial support. The government last year approved a cash injection of INR800 crore as part of a broader plan to provide as much as INR5,000 crore to the company. The national carrier is expected to post a loss of INR5,400 crore for the financial year ending 31 March 2010.
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