Jet close to tying up funds for fleet buy

The Naresh Goyal-promoted Jet Airways India is the final stage of talks with foreign export credit agencies for raising over Rs 10,000 crore to acquire 30 new Boeings and Airbuses.

"We will raise Rs 10,880 crore through these agencies while the remaining 15 per cent of the funds would be met through our internal accruals and foreign currency convertible bonds (FCCBs)," a senior company executive said.

The total fund requirement for the fleet acquisition is Rs 13,000 crore. Jet Airways is planning to raise 85 per cent of the funds for the acquisition of its fleet in the form of long-term loans from export credit agencies including US Exim Bank and COFACE in Europe.

A senior Jet executive said the company was in an advanced stage of talks with export credit agencies and international banks such as Citigroup and ABN Amro for raising funds.

Jet needs to make progressive payments based on the price of the aircraft prior to their delivery. The airline is acquiring 30 aircraft, including 10 Boeing 737 next generation carriers, 10 Boeing 777-300 ER and ten A330-200. The deliveries of the Boeing and Airbus aircraft will begin from March 2007.