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Air India board OKs $195 million bridge loan for Dreamliner buy
State-run Air India's board on Tuesday approved a $195 million bridge loan for financing its purchase of
two Boeing (BA.N) 787 Dreamliner aircraft, as the carrier takes its first steps towards a controversial
aircraft buy programme.
The bridge financing, led by Standard Chartered Bank's (STAN.L) India unit, is expected to be closed
soon; Air India said in a statement. The carrier will push ahead with its purchase of 27 Dreamliner
aircraft, aviation minister Ajit Singh said last week, despite its heavy debt burden and a long-running
dispute with Boeing.
Cash-strapped Air India, which owes about $500 million to oil companies and $240 million to airports, is
currently negotiating for nearly $1 billion as compensation from Boeing for the delayed delivery. Air
India's board also approved the direct import of jet fuel and hedging of fuel, the statement said.
India last month approved direct import of jet fuel in a move to help reduce costs in the sector where
five of the top six carriers are in the red.
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GM India to source components worth $1 b from domestic suppliers
General Motors India Pvt. Ltd will source components worth $1 billion (Rs. 5,000 crore) for its overseas
operations in the next two years from the chain of Indian suppliers it has developed, but it is yet to
synergize with competitors to save costs, even as Ford India favors synergy with Peugeot.
GM India currently has 722 local suppliers whom it has awarded contracts worth nearly $500 million (Rs.
2,500 crore). They include 200 suppliers who supply for the company’s Indian as well as global
operations, Mr. P. Balendran, Director and Vice-President, Corporate Affairs, GM India, told Business
Line here on Friday. They are categorized as tier-one, two and three suppliers, who manufacture parts
and spares as per GM’s specifications.
About GM India’s plans for light commercial vehicles (LCVs), he said these would be manufactured at the
Halol plant in Gujarat. Multi-utility vehicles (MUVs) and LCVs capable of carrying up to two tons of cargo
would be launched by December 2012.
Asked whether GM and Peugeot would synergize their activities in India, Mr. Balendran said their global
alliance will have a long-term positive effect on GM worldwide, particularly in Europe. “However, it is
too soon to say how it will impact India and the Asia-Pacific region,” he said. So far, neither in India nor
anywhere else has the two majors synergized to share suppliers or facilities.
In February, GM had announced to pick up a 7 per cent stake in PSA Peugeot Citroen in a global alliance
targeting cuts worth about $2 billion in annual costs as they would share vehicle platforms, components
and modules. Also, they would have a global purchasing joint venture for the sourcing of commodities,
components, goods and services with combined annual purchasing volumes of about $125 billion,
pooling of R&D for products they would market and sell separately.
Ford India Managing Director and CEO, Mr. Michael Boneham, had said his company could look into
such a synergy with Peugeot India, its neighbor at Sanand in Gujarat.
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