ICICI gets nod for AI loan re-financing

The Air India board, which met today, has mandated ICICI Bank to re-finance the Rs5,500-crore loan to buy 21 Airbus A 320 family aircraft. The board also approved the delivery financing of three B 777- 300 ER aircraft and one GE-90 spare engine with US Exim support, worth $475 million. The mandate for 85 per cent of this amount has been given to Citibank, while Standard Chartered Bank secured the mandate for the remaining amount.

In a statement issued tonight, Air India said four A 310 passenger aircraft, along with the simulator, will be disposed of. The board also approved the dry lease of 10 Airbus A 320 aircraft to replace the aging fleet and approved the dry lease of two Airbus A 330 aircraft.

It has also been decided to continue the dry lease of four B 737-800 aircraft for Air India Express, which will now have a fleet of 21, including 17 owned aircraft. The acquisition of 30 acres of land near the Nagpur SEZ area to set up an MRO facility has also been approved.

It is not known whether the board discussed the continuation of Pawan Arora as the CEO of Air India Express. Three independent directors, Anand Mahindra, vice-chairman and managing director of Mahindra & Mahindra, Kolkata-based industrialist Harsh Neotia, and Air Chief Marshal (retd) Fali H Major, had, on November 18, recommended his ouster.

The state-run carrier has accumulated losses of Rs15,000 crore over the last four financial years and has a total debt of Rs48,000 crore, including Rs3,000 crore in long-term debt to acquire aircraft. The carrier lost Rs2,226 crore in 2007-08, Rs7,189 crore in 2008-09, and Rs5,551 crore in 2009-10. The government had recently infused equity of Rs1,200 crore into the carrier, which, together with the equity infusion of Rs800 crore in 2009-10, raised the equity base to Rs2,145 crore.