New Delhi: Air India is planning to raise $555 million by way of bridge loan for the purchase of three Boeing Co. aircraft, according to a tender document.

Air India, which is in the process of being privatised, would be taking delivery of three B777-300 ER planes early next year. Now, the airline has sought offers from “banks/ financial institutions to arrange a bridge financing up to $555 million for financing the acquisition of the three B777-300 ER aircraft to be drawn equally at the time of taking delivery of the aircraft," the document said.

At current exchange rate, the amount would be around Rs3,594 crore.

Two of the aircraft are to be delivered in January and the remaining one in February. According to the the purchase agreement with Boeing, Air India is to buy 15 B777-300 ER aircraft and it has already taken deliver of 12 such planes.

In 2006, Air India placed orders with Boeing for 68 aircraft—27 Dreamliners, 15 B777-300 ERs, eight B777-200 LRs and 18 B737-800s. Of these, the state-run carrier has already taken the delivery of 65 planes. At present, the flagship airline has a fleet of 115 aircraft. The B777-300 ER aircraft owned by Air India has 342 seats for passengers.

“Government of India has indicated that they would issue its guarantee for the bridge financing of B777-300ER aircraft for a period of 12 months or till the date the loan is refinanced whichever is earlier," the document said. As per the document, no commitment fee would be paid to the bidder and that the “pre-payment/ short closure of the bridge loan should be allowed without any extra cost" to the airline.

The financing facility would be a direct loan without the requirement for formation of a Special Purpose Vehicle (SPV) structure which requires title transfer, it added. Earlier this month, the airline took delivery of its last Boeing 787-8 Dreamliner.

The government is working on the modalities for the proposed privatisation of Air India, which has been in the red for long. The carrier is moving ahead with its expansion plans and has launched flights to various overseas destinations, including Washington and Copenhagen, so far this year.

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