May 19, 2010                                                                                                                      Please superscribe on the envelope

                                                                                                                --------------------------------------------------

                                                                                         Ref.No. HFD/4/Aircraft Re-finance/

                                                                              Due Date: 21st June, 2010

 

 

Date Extended

 

Extended Last Date For Submission of tender is 31.08.10 (1600 hrs)

 

Other terms and conditions remain same.

 

 

 

 

 


Amendment

 

“The Rupee loan proposed to be re-financed as per RFQ has a moratorium on repayment of principal of about 2 years after final drawdown of loan in April, 2010.  Thus, repayment of principal on said loan will commence in 2nd/3rd quarter of 2012.”

 

 

 

 


Sub: Invitation of Offers for Long Term Loan Funds for re-financing the Purchase of Aircraft, spares and Related Equipments 

 

National Aviation Company of India Ltd. (NACIL) invites sealed offers from Indian and Foreign Banks / Financial Institutions for:

 

Description                                                                                                   Amount

Long Term Loan Funds for Re-financing the purchase of twenty one (21) aircraft, spares

& related equipments by NACIL                                                       Upto U.S.$ 1150 Million *

 

* The aircraft details and requirement of refinancing is given in Annexure-I.

 

1.                              Erstwhile Indian Airlines Ltd (IAL) and erstwhile Air India Ltd. (AIL) have been merged into a new wholly owned Government Company, National Aviation Company of India Ltd. (NACIL). NACIL is operating its flights under the brand of Air India. Post merger, the aircraft acquisition project of erstwhile IAL comprising of purchase of 43 new A320 family aircraft namely 19 A319, 4 A320 and 20 A321 fitted with CFM engines has been taken over by NACIL. The Airbus aircraft acquisition project has Government of India’s approval

 

2.                              The first 22 aircraft were financed in tranche of 10 and 12 aircraft in foreign currency. The remaining 21 aircraft has been financed through rupee loan equivalent of US$ 1150 Million obtained from consortium of Indian scheduled banks with the support of 100% Government of India (GOI) guarantee. All the 21 aircraft have already been delivered.

 

3.                              NACIL now intends to refinance these 21 Airbus aircraft to reduce the cost of financing and has taken up with Airbus Industrie to have the support of ECAs for their guarantee for refinancing. The refinancing would continue to have the support of GOI guarantee.

 

4.                              NACIL, therefore, invites offers for long term loan funds for refinancing the purchase cost of aircraft, spare engines and other related equipments like simulator, BFE items, aircraft spares, workshop toolings, ground equipment, financing of upfront financing charges, ECA premium, GOI guarantee fee as may be applicable etc. for 21 Airbus aircraft delivered during April’09 to April’10. The delivery schedule and requirement of refinancing is given in Annexure-I.

 

5.                              The banks / financial institutions either individually or in consortium are requested to submit refinancing offers on the following basis:-

 

A.

Borrower

:

National Aviation Company of India Ltd.

 

B.

Amount of refinancing required

:

Upto USD 1150 million

C.

Currency

:

US Dollar or Indian Rupee or a mix of both currencies.

 

D.

Interest Rate

:

Fixed and / or Floating

(i)       With ECA guarantee

(ii)                                                                                                                                                                With GOI guarantee only i.e. without ECA guarantee indicating extent of GOI guarantee required

(iii)                                                                                                                                                                Any combination of above

 

E.

Term of the Facility

:

(i)                              Tenor, Minimum 12 years from date of drawdown by NACIL. NACIL however, would prefer a higher repayment period. (Also refer para 7 below)

(ii)     Prepayment should be permissible without penalty.

 

F.

Validity of offer

:

Minimum 3 months.

 

6.                              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, underwriting/arrangement 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

 

(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 convert 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 instalments, etc.

 

(i)                                                                                    If, the terms vary depending upon the nature of security say with ECA guarantee, with GOI guarantee only, Partial GOI guarantee etc., the same should be clearly spelt out in the offer.

 

(ii)                                                                                  Extent of financing and number of aircraft to be financed.

 

(iii)                                                                                 Structure of financing.

 

7.            The prospective lender(s) can offer refinancing for all 21 or lesser number of aircraft. However, NACIL require refinancing of its entire requirements of funds already availed for aircraft, spares & related equipments through Indian rupee loan for the aircraft now offered for refinance. The offer for refinancing should therefore be for the entire amount of loan funds required by NACIL for number of aircraft covered by the refinancing offer. If refinancing offer is based on ECA guarantee, it should also be accompanied by a refinancing offer through Commercial loan for non-ECA portion so as to provide entire loan funds required by NACIL for number of aircraft offered for refinancing. However, the commercial portion of loan may be offered either by same lender / consortium or through a firm underwritten refinancing offer obtained from other lender / consortium. The matching tenor of 12 years would be preferred for commercial loan also.

 

8.            NACIL will also look into any innovative structured refinancing package that may be offered to reduce the cost of financing. The details in this regard, amongst others to reflect;

 

(a)                                                                                             The term sheet of structured refinancing 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-ŕ-vis additional costs

 

(f)                                                                                               All other relevant information that may be considered necessary by the lender for its economic evaluation by NACIL.

 

9.            NACIL will require the right to make currency and interest swaps.

 

10.        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 the offer. To enable NACIL to determine the applicable withholding tax rate for the offer submitted, 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 NACIL needs to be based in Ireland.  Further, prospective lenders should agree to provide their / SPVs / Legal counsels etc Indian PAN number as required under section 206 AA of Indian Income Tax Act, 1961 if their offer is accepted by NACIL.

 

11.        NACIL reserves the right to accept or reject any or all offer(s) in whole / part without assigning any reason.

 

12.        The offer submitted as a part of a consortium / syndicate should be accompanied by proof of the consortium / syndicate.

 

13.        The firm and underwritten offers received from Indian and Foreign Banks / Financial Institutions would only be considered.

 

14.        The offer should be sent in a sealed envelope so as to reach us not later than 1600 hrs on 21st June, 2010, to the attention of:

 

Mr. A.K. Agrawal

Dy.General Manager – Finance

Finance Department,

National Aviation Company of India Limited

Airlines House,

113, Gurudwara Rakabganj Road,

New Delhi - 110001

Telephone No. +91-11-23422066 / 23422072

Fax No. +91-11- 23422091

 

15.                          Offer need not be submitted through e-mail or fax as the offer received in sealed envelope as per 14 above shall only be considered. 

 

 

 

Click here to download Annexure-I