IANS
 
Bangalore, Oct 14: India's low cost carrier Air Deccan plans to raise $100 million (Rs.4.6 billion) from a consortium of European banks over the next 15 months for funding its operational and expansion plans, a top company official said here Friday.

"We have signed a deal with a consortium of European banks to raise the funds. The first trance of $30 million has been received from Investec Bank of Britain and HSH Nord Bank AG of Germany," G.R. Gopinath, Deccan Aviation's managing director, told reporters here.

The company has floated a special purpose company with funds from the consortium in Cayman Islands to finance the purchase of 60 Airbus A-320 jets over the next seven years.

A charitable institution, based in Cayman Islands, will also form a part of the consortium. The banks will get a return on the investments through a fee Air Deccan will pay the consortium when each of the aircraft is delivered.

The SPC will also have the right to market the aircraft if Air Deccan fails to acquire them from AirBus Industrie and IAE (Rolls Royce and Pratt & Whitney) engines.

The pre-delivery payments (PDP) of the aircraft have been funded by public sector banks, including State Bank of India, Punjab National Bank and Union Bank of India.

"This pioneering financial deal is a landmark in the Indian aviation sector, as it reflects the investors' trust in our business model, acceptance of the LCC (low-cost carrier) concept in the sub-continent and our strong management team," the company's finance director Mohan Kumar said.