SPV set up in Cayman Island for Indian's aircraft buy

New Delhi: German banks KfW and H.S. Nord, from which Indian has tied up financing for the first batch of 10 Airbus A-320 aircraft, have set up a Special Purpose Vehicle (SPV) in Cayman Island for the transaction.
The SPV, called Bayern Incorporated, has been created to enable collateral for the loan that has been taken, official sources said. The banks will lend $500 million to Indian, which is to be paid back over 12 years. ``The bankers were keen that the SPV be set up in a neutral territory, therefore Cayman Island was chosen," the sources added.
The airline, which has signed a deal to purchase 43 Airbus aircraft at an estimated value of more than $2 billion, is to receive 10 Airbus aircraft from June.
Although itis to acquire 43, the SPV is currently only for the first tranche of 10.
Meanwhile, the airline would look to tie-up rupee financing from Indian banks for the remaining aircraft.
23/02/07 Ashwini Phadnis/The Hindu Business Line

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Categories: foreign feb 2007, indian feb 2007