Four of India's private operators are looking abroad to finance their government-approved fleet expansion programmes, driven chiefly by the better terms on offer compared to those in the depressed domestic capital markets.
Most significantly, East West Airlines is hoping to become the first Indian private airline to secure an Eximbank export credit guarantee for its planned order of two B737-400s. The carrier initialled a letter of intent last year with Boeing but will only firm up the order if the Exim guarantee is forthcoming - a decision is expected by May. The carrier still hopes to finance the transaction through domestic banks, however.
East West opted to seek export credit as part of the strategic plan drawn up by consultants Price Waterhouse, who were drafted in to revamp the carrier's entire operation. The carrier, which currently operates seven B737-200s and three Fokker 50s, is looking to add a further nine B737s over the next five years.
Troubled carrier Modiluft, which is fighting off a hostile takeover bid from rival NEPC, is hoping to receive government clearance for a $60 million Eurobond issue - a stated aim of chairman Satish Kumar Modi for at least the past two years. He wants to use the money to boost equity and help fund the lease of a further five B737-400s over the next two years to add to its leased fleet of four B737-200s and three B737-400s.
But Modiluft's share price has slumped by over 70 per cent in recent months and some analysts question how it plans to raise funds in foreign markets when it has no stability at home. Moreover, Modiluft is currently looking for a managing director to guide its expansion - the carrier ended its management contract with Lufthansa at the end of 1995.
Meanwhile, both Jet Airways and Sahara Indian Airlines are both in discussions with lessors and banks over loans to finance the acquisition of jets and turboprops. Jet is talking to GE Capital and the Bank of America about structuring leases for two B737-400s due for delivery in May.
Sahara is in negotiations with a consortium led by ABN Amro for a $80 million loan to buy five ATR42s to use on feeder routes into Delhi and Calcutta.
Ravi Prasad
Source: Airline Business
