Air Deccan lines up Rs 450 cr from foreign banks
Low-cost carrier Air Deccan has lined up Rs 450 crore of financing through an innovative deal with a consortium of European banks by giving them the right to receive its $2bn 60-Airbus aircraft order.
By TNN |
NEW DELHI: Low-cost carrier Air Deccan has lined up Rs 450 crore of financing through an innovative deal with a consortium of European banks by giving them the right to receive its $2bn 60-Airbus aircraft order.
The airline reeling under losses of over Rs 340 crore claims that this deal will help swell its bottomline over a 15-month period. Capt GR Gopinath, managing director, Air Deccan said the airline has already received the first tranche under the deal with Investec Bank, UK, and HSH Nord Bank AG of Germany.
The first two tranche would be reflected in the balance sheet in the current financial year. In turn, Air Deccan has assigned its future aircraft supply contract in favour of a Special Purpose Company (SPC), funded by the two international banks, which would carry the transaction, Mohan Kumar, director finance, Air Deccan, said.
The international banks would help Air Deccan to fund the ordered aircraft. Mr Kumar said the fund would be used for working capital and to develop the market in future.
The company said that it had entered into pre-delivery payment for the aircraft order by a consortium of public sector banks including SBI, PNB and UBI. The SPC would have the right to market the aircraft and satisfy the pre-delivery payment lenders and recover the investment, the company said.
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Mr Gopinath said the airline while consolidating its operations will continue to fly to newer destinations over the next couple of months.Start a SIP with as low as ₹500 with ET Money App!
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