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Paramount to pay $580m for 15 Embraer aircraft

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P R Sanjai Mumbai
The Coimbatore-based Paramount Airways will place an order to buy 15 aircraft for $580 million (Rs 2,600 crore) with the Brazilian manufacturer Embraer.
 
Sources close to the development said the airline is looking at acquiring ten 86-seater Embraer 175 model aircraft and five 118 seater Embraer 195. The list price of Embraer 175 is over $35 million while Embraer 195 comes for $46 million.
 
This is in addition to the earlier order the airline had placed with the Brazilian company for 15 Embraer 170, Embraer 175 and Embraer 195 group of aircraft for a total outlay of $525 million.
 
M Thiagarajan, managing director, Paramount Airways, refused to comment on the issue. However, sources confirmed that the deal will be inked by mid-September.
 
They added that Paramount is also exploring the option of further diluting 10 per cent of its equity to global private equity funds. "Five overseas and two domestic private equity funds are in talks with Paramount for picking up atleast 10 per cent stake in the airline," they said.
 
Paramount had taken delivery of its third aircraft from Embraer last week. This will help the airline increase its daily flights to 30 from the current 20.
 
Paramount is also introducing first class with the induction of its third aircraft. "The airline will enhance flights to its basic routes in South India including Coimbatore, Madurai, Kochi, Chennai, Bangalore, Hyderabad and Thiruvananthapuram. It will connect all key cities in the region," a source said.
 
Earlier, Kotak Mahindra Bank's private equity fund India Growth Fund (IGF) had picked up 10 per cent stake in this start-up airline for $15 million. Bennet, Coleman & Company (BCCL) had also picked up 2 per cent stake for $3 million. Paramount launched its commercial operations on October 19, 2005.

 
 

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First Published: Aug 29 2006 | 12:00 AM IST

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