With the first of the 27 Boeing 787 Dreamliners for Air India expected to arrive next month, the cash-strapped national carrier has decided to sell and lease-back seven of them and has started looking for bridge financing worth USD 230 million. While the first of these much-delayed planes would be delivered by the American aircraft manufacturer in January, the second one would come in March, the third in April and two each in May and June.

The Air India Board has already decided to sell these aircraft to a lessor and immediately lease them back under an operating lease of 12 years with an option to extend the period. Under the sale and lease-back arrangement, one party sells a property to a buyer who immediately leases it back to the seller. The arrangement allows the initial buyer to make full use of the asset while not having capital tied up in it.

The airline required interim bridge financing for a period ranging between 6-12 months to accept delivery of the first two B 787-8 planes and has invited offers from banks and financial institutions to arrange for USD 230 million or the equivalent of cost of the two planes. The bridge loan facility would be repaid on conclusion of the sale and lease-back arrangement, they said.

Air India has made it clear to its would-be lenders that the bridge loan, covering 100 per cent cost of the aircraft would not be covered by government guarantees but the planes would be offered as security. A Few months ago, the US Exim Bank decided to support Air India's plane acquisition programme from Boeing to a total extent of USD 3.4 billion, including the B-787 Dreamliners.