Mumbai: With lenders not showing much interest, the national carrier, Air India has extended its USD 500-million bridge financing offer by one week to July 12.
Air India is planning to raise the money to pay for the five Dreamliners, which are to be delivered beginning this month through December.
The airline had extended the last date to July 12 from July 5, according to AI sources.
The deal is part of the 68 aircraft the carrier had ordered in January 2006, which includes 27 Dreamliners, 41 B-777s and B-737-800s from Boeing. Apart from this, the national carrier had also booked 43 planes from Airbus. So far, Boeing has delivered seven Dreamliners to the airline.
Air India had on June 26 invited bids from banks and financial institutions to arrange bridge finance of up to USD 500 million to pay for five Boeing 787s, setting July 5 as the deadline.
A bridge loan is typically used to meet payment commitments until longer-term financing is arranged.
Air India is seeking to raise the loan for six-twelve month period and plans sell and lease back these planes, according to the term-sheet. The airline says it will use the proceeds from sale and lease back to repay its loans.
However, two days later, the management amended the bidding document by adding a new clause.
"Selected bidder/s for bridge financing will have the right of first refusal for long-term financing or take-out financing under the sale and lease back clause, provided the selected bidder matches the terms and conditions of the lowest bidder for long-term financing," the amended document said.
This bridge loan facility will not be covered by government guarantee, therefore Air India will offer the planes or an equivalent as security, the document also said.
Air India has tied up for the bridge financing for its first seven 787 Dreamliners delivered to the airline between September 2012 and June 2013.
Air India is one of the first customers of the Dreamliners when it ordered 27 aircraft in January 2006.
Though the delivery of the these aircraft was scheduled from September 2008, the state-run airline could get the first plane only in September 2012 due to several reasons for which it has been promised composition.