Air India gets $475 mn bridge loan form StanChart

National carrier Air India has got a ‘bridge loan’ from Standard chartered bank of $475 million for induction of three Boeing 777 aircraft.

| May 11, 2010, 06.47 PM IST

National carrier Air India has got a ‘bridge loan’ from Standard chartered bank of $475 million for induction of three Boeing 777 aircraft. The interest rate that Air India will be paying on the loan is 375 basis points over libor.

This will be a short term arrangement as the management is seeking a ‘letter of comfort’ from the government of India according to an Air India official who did not want to be named. After receiving the ‘letter of comfort’ the airline will convert this short term debt into a long term one through a ‘refinanced loan’ as that will help the airline in bringing down the interest cost.

Air India got the first delivery of the Boeing 777-300 ER on 30th April. The next two deliveries are scheduled for end of May and July. Air India’s current long term debt for aircraft acquisition is a massive Rs 22, 500 crore. Its current working capital loan is Rs 17000 crore.

Air India already has a wide-body fleet of 35 aircraft, including 17 Boeing 777s owned by the carrier and four leased. It is also expecting the delivery of over two dozen newly launched Boeing 787 aircraft from next year.

Air India is estimated to have lost 5400 crore rupees in the fiscal year ended March 31 and is expected to remain loss-making for a few more years. Last fiscal year, the Indian government injected 800 crore rupees as equity to help shore up Air India's finances. It will be receiving another 1200 crore rupees in June this fiscal.

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