Bravia Capital, IL&FS form JV for aircraft financing

Encouraged by the booming Indian aviation market, Bravia Capital Partners has formed a joint venture with Infrastructure Leasing and Financial Services (IL&FS) to finance the fleet financing requirement of Indian carriers.

The venture will also invest in acquiring commercial aircraft, which will be leased to or financed for airlines in India.

This is the first such arrangement that has been worked out to specifically target the Indian aviation financing market.

Domestic carriers plan to buy about 125 aircraft, with a list price of over $15 billion in five to seven years. At the same time, these companies are also looking for funds to make initial payments for placing the orders for these aircraft.

Typically, domestic airlines source funds from overseas financing companies and traditional financial institutions to buy aircraft.

"Newly formed airlines with well-defined business plans, as well as India's legacy carriers, will benefit from the venture," Bravia said in a statement.

As per the joint venture agreement, Bravia Capital and IL&FS will work together to source and market appropriate aircraft, develop traditional and new short-term structures, arrange debt financing while investing their own equity risk capital.

In addition, Bravia will also give technical support for each aircraft transaction, which includes cargo conversion and maintenance management facilities.

"Few markets in the world are as vibrant as the India's," said Bharat Bhise, chief executive, Bravia Capital Partners.

Bravia and IL&FS will jointly market the venture to airline operators and other aviation projects and develop local financial structures to support transactions.

The venture will also arrange, source and participate in syndication of senior debt, mezzanine debt and equity financing, as appropriate.