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Stanchart loan for aircraft purchase

Our Bureau

MUMBAI, Dec. 8

STANDARD Chartered Bank is understood to be arranging a $350-million loan for Jet Airways.

The money is to part-finance the acquisition of new aircraft. Jet currently has a 30-aircraft-strong fleet.

The seven-year loan, at 45-50 basis points over Libor, was in the form of a dollar-rupee swap and would be guaranteed by the US Exim Bank, banking sources said.

The fund will be deposited in State Bank of India's foreign account. SBI locally is guaranteeing the seven year rupee loan around 11.5 per cent which will be subscribed to by banks and FIs.

In August, Jet Airways had reported early 2001

commencement of deliveries of 10 new aircraft, in a deal totally worth $400 million. The planes belong to the Boeing 737-700/800/900 series with Jet earning in the process the distinction being the first Asian airline to fly the 737-900. They were to cat er to both fleet expansion as well as replacement.

The new deliveries materialised through Jet exercising its option for 10 more aircraft, included in a previous deal which saw similar delivery of 10 Boeing 737 aircraft.

A senior Jet official said that while the first new aircraft was expected to arrive in the third week of January 2001, the entire deal would be in place towards either this month-end or early in the new year.

He did not confirm the names of banks involved but said that such acquisitions were typically financed from a mixture of debt and equity with a consortium of banks raising the required loan. Jet, however, has no plans at present to swap the previously ra ised debt with any cheaper alternative.