Indian to raise loan for aircraft purchase

The state-owned Indian is in talks with IDBI bank to raise Rs 2,400 crore in rupees loan for financing the purchase of ten mint-fresh planes from Airbus, starting 2008. This will be the first time the airline is seeking rupee financing for aircraft purchase. The move will help Indian reduce the transaction costs. "The airline has got the go ahead for rupee financing and is in talks with IDBI, which was among the financial institutions shortlisted for raising funds for its initial aircraft acquisition programme. Indian is now in talks with IDBI to finalise the terms and conditions," a source said. Indian, the source said, intends to secure rupee loan to finance the aircraft that are slated to be delivered after 2008. "It had recently tie up loans for the first lot of 10 Airbus jets under its previously agreed 43-aircraft order. The fresh loan is being sought for new aircraft that will be inducted from 2008 onwards," the source added. Indian had secured a loan of $540 million from the German national bank KFW to pay for the delivery of first 10 Airbus planes. The loan, covers those aircraft that it will receive till early 2008.

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