Noida international airport plans to raise Rs 3,725 crore in term loans

The upcoming Noida International Airport (NIA) at Jewar in the National Capital Region (NCR) plans to raise up to Rs 3,725 crore in term loans as part of the debt portion for expenditure including capex.
 
The estimated project cost of Phase I of the airport is Rs  5,730 crore and is funded in a debt-equity ratio of 65:35.
 
Yamuna International Airport (YIAPL), with Zurich Airport International AG’s (ZAIA) as a sponsor, will set up the airport on a build, operate, and transfer basis. The company’s equity requirement over FY22-FY26 is Rs 2,005 crore, which needs to be entirely funded by ZAIA. As of Septe­mber 29, an equity of Rs 259 crore has been infused so far.
 
India Ratings has assigned “A-” rating for term loans with comfort derived from the sponsor Zurich Airport’s commitment to supporting the project. ZAIA has provided undertakings to meet any cost overrun till the achievement of the commercial operations date of Phase I.
 
The loan facility has a one-year moratorium and a repayment tenor of 16 years. The debt structure also features up to two quarters of debt service reserve, trust, and retention agreement establishing waterfall mechanism and restricted payment conditions.

Under the debt structure, YIAPL has to reduce debt commensurately in case of a reduction in the approval of capex by the Airports Economic Regulatory Authority. Also, the sponsor (Zurich Airport) has to give an undertaking that funds infused in YIAPL by it will be unsecured and subordinate to the senior debt during the debt tenor.
 
The company is required to develop the airport in four phases with capacity starting from 12 million passengers in phase one to 70 million passengers in phase four. The environment clearance for the project is in place. The company received the appointed date on October 1 and the construction timeline is three years from the appointed date.
 
NIA will be the second airport in the Delhi–NCR and majorly serve domestic passengers. The  Delhi Interna­tional Airport is incurring capex to increase its capacity to 100 million passengers from 70 million now.