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July 15,2011
Please superscribe on the envelope
------------------------------------------------Ref.No.DF/PROJ/RFP-AIL/ACFTFIN
Due Date: 08.08.2011
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Sub : Invitation of Offers for Long Term Loan Funds for financing the Purchase of
Aircraft
Air India (AI) invites sealed offers from Indian and Foreign Banks / Financial Institutions for:
Description
Amount
Long Term Loan Funds for financing the purchase of seven
B787-8 together with two spare engines by AI
Upto US$ 832.269 Million*
*The tentative delivery schedule and anticipated
Annexure-I.
requirement
of loan funds IS gIven III
1.
Air India (AI) a wholly owned Government Company has signed a Purchase Agreement
with Boeing Co. for its aircraft acquisition project comprising purchase of 50 new
aircraft viz 8 B777-200 LRs, 15 B777-300 ERs and 27 B787 aircraft fitted with GE
engines. The Boeing aircraft acquisition project has Government of India's approval.
2.
The Government has also approved the provision of Gal guarantee to support the
financing for the project cost. However, AI would prefer to obtain the Gal guarantee to
the minimum extent to save on guarantee cost.
3.
The financing for first 20 aircraft had been tied up in four tranches of seven, three,
seven and three aircraft. AI has already taken delivery of these aircraft.
4.
AI now invites offers for long term loan funds for financing the purchase cost of 7
B787-8 aircraft and 2 spare engine scheduled for delivery between October 2011 to
March 2012. The delivery schedule and estimated requirement of loan funds is given
in Annexure-I.
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Regd. Office: Air India Ltd., Airlines House, 113, Gurudwara Rakabganj Rd., New Delhi - 110001. Tel. : 2342 2000
www.airindia.in
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-25.
The banks / institutions are requested to submit financing offers on the following basis:-
A.
Borrower
B.
Amount
Upto USD 832.269 Million
C.
Currency
US Dollar or Indian Rupee or a mix of both
currency
D.
Interest Rate
Fixed and / or Floating
Air India
(i) With US Ex-1mBank guarantee
(ii) With GOI guarantee only i.e. without US
Ex-1mBank guarantee indicating extent of
GOI guarantee required
(iii) Without either US Ex-1mBank or GOI
guarantee
(iv) Any combination of above
(v) AI would prefer direct loan
E.
F.
(i) US Exim Guaranteed Facility
for 85% of the aircraft cost
(ii) Commercial Facility for 15%
of the balance aircraft cost
Term of the Facility
-
12 years
- 5 to 7 years
Minimum three months.
Validity of the Offer
6.
Ex-1mBank's Final Commitment for the Delivery financing is under process.
7.
It is requested that fully underwritten proposal elaborating all terms and conditions be
submitted with full particulars of;
(i)
Financing cost including interest, upfront fee, annual fee & charges, any other
associated fees or cost including legal and out of pocket expenses with details
and ceilings against each.
(ii)
The risk mitigation strategies for currency and interest for loan facility offered
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Regd.Office: Air India ltd., AirlinesHouse, 113, GurudwaraRakabganjRd.,New Delhi. 110 001. Tel. : 2342 2000
www.airindia.in
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-3(iii)
Tax implications under different alternate financing options offered
(iv)
Collateral security required
(v)
Other terms like moratorium, balloon payment, facility for restructuring, option
to covert floating interest into fixed interest or vice-versa, choice in respect of
periodicity of LIBOR or other reference rate forming the basis for determination
of interest rate, periodicity of repayment of loan installments, etc.
(vi)
If, the terms vary depending upon the nature of security say with ECA
guarantee, with Gal guarantee only, partial Gal guarantee etc., the same should
be clearly spelt out in the offer.
(vii)
Extent of financing and number of aircraft to be financed
(viii)
Structure of financing
8.
The prospective lender(s) can offer financing for all
aircraft.
aircraft or lesser number of
9.
AI will also look into any innovative structured financing package that may be offered
to reduce the cost of financing including Sale and Lease Back option for a period of
10/12 years. The details.in this regard, amongst others to reflect;
(a)
The term sheet of structured financing offered
(b)
A diagram outlining the structure
(c )
Description of the advantages and risks associated.
(d)
Additional costs to be borne by the airline before and after closing the
transaction with cap on all fees
(e)
Comparative economic advantage vis-a-vis additional costs
(f)
All other relevant information that may be considered necessary by the lender
for its economic evaluation by AI.
10.
AI will require the right to make currency and interest swaps.
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Regd. Office: Air India ltd., Airlines House, 113, Gurudwara Rakabganj Rd., New Delhi - 110001. Tel. : 2342 2000
www.airindia.in
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11.
The Indian Income-Tax Act imposes withholding tax on interest payments to lenders
outside India. The rate of withholding tax on interest payments will be considered in
financial evaluation of the offers to determine the all-in cost of your offer. To enable us
determine the applicable withholding tax rate for your offer, the jurisdiction of lending
must be clearly spelt out in the offer. In case, the financing is offered through lease
structure, then the special purpose vehicle (SPV) to be established for the purpose for
leasing of aircraft to AI, needs to be based in Ireland or any other tax friendly
jurisdiction.
12.
AI reserves the right to accept or reject any or all offer(s) in whole / part without
assIgmng any reason.
13.
The offer should be sent in a sealed envelope so as to reach us not later than 1600 hrs on
August 08, 2011 to the attention of:
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Mr.H.J.Mehtaji
General Manager-Finance
Finance Department,
Air India
Old Airport, Santacruz (E),
Mumbai 400 029
Telephone No. 091-022-26265732
Fax No. 091-022-26157028
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14.
Offers need not be submitted through e-mail or fax as the offer received in sealed
envelope as per para 13 above shall only be considered.
Thanking you,
Yours faithfully,
For Air India Limited
(S. Venkat)
Exe.Director - Finance
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Regd. Office: Air India Ltd., Airlines House, 113, Gurudwara Rakabganj Rd., New Delhi - 110001. Tel. : 2342 2000
www.airindia.in
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Financina Reauirements for 2011 - 787 Deliveries
Amount in USD
AircraftI Engine
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1st 787 8
2nd 787 - 8
3rd 787 - 8
4th 787 - 8
5th 787 - 8
6th 787 - 8
7th 787 - 8
1st Genx Spare Engine
2nd Genx Spare Engine
Total
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Tentative
Delivery
Dates
Oct-11
Oct-11
Nov-11
Nov-11
Nov-11
Dec-11
Dec-11
Oct-11
Oct-11
Net Cost
15%
Commercial
Financing
85% EximFinancing
Total
Financing
EximLoan
Exp Fee @
4%
109.563
109.763
110.046
110.321
110.605
111.148
111.148
16.111
16.197
93.129
93.299
93.539
93.772
94.014
94.476
94.476
13.694
13.768
3.725
3.732
3.742
3.751
3.761
3.779
3.779
0.548
0.551
96.854
97.031
97.281
97.523
97.775
98.255
98.255
14.242
14.318
16.434
16.464
16.507
16.548
16.591
16.672
16.672
2.417
2.430
113.288
113.495
113.788
114.071
114.365
114.927
114.927
16.658
16.748
804.902
684.167
27.367
711.533
120.735
832.269
Total Exim