New Delhi - Air India plans to raise $555 million through bridge loans to buy three Boeing aircraft scheduled for delivery early next year, as per a tender document floated by the national carrier.
The bids for the bridge financing, to be guaranteed by the government, close on November 1.
"Air India invites offers from banks/financial institutions to arrange a bridge financing up to $555 million for financing the acquisition of three B777-300 ER aircraft to be drawn equally at the time of taking delivery of the aircraft," said the document issued this week.
Air India has agreed with US major Boeing to buy 15 B777-300 ER aircraft and has already taken delivery of 12 planes. Two of the remaining aircraft are to be delivered in January and the last in February.
"The government of India has indicated that they will issue guarantee for the bridge financing of B777-300 ER aircraft for a period of 12 months or till the date the loan is refinanced, whichever is earlier," the document said.
"Pre-payment/short closure of the bridge loan should be allowed without any extra cost to Air India," it said.
The financing facility would be a direct loan without the requirement of formation of a special purpose vehicle (SPV) structure, which requires title transfer, it added.
Air India placed orders for 68 Boeing aircraft in 2006, including these 15 B777-300 ERs and 27 Dreamliners, of which the airline has already taken delivery of 65 planes.
Earlier this year, the government announced its intent to divest from ownership of Air India.