Aegean Airlines will proceed with a sale of bonds on March 5-7 to raise up to E200m for down payments on new Airbus aircraft and the construction of a new pilot training centre. According to the public offering prospectus, about 30% of the issue will be allocated to retail investors, while 70% will go to “qualified investors”. The seven-year bonds, each with a nominal value of E1,000, will pay a semi-annual coupon. In Greece interest payments are taxed at 15%. Trading of the bonds on the Athens stock exchange will start on March 13. Pricing will be determined via book building. Aegean will use 75% of the proceeds to partly finance down payments on new aircraft based on a deal with Airbus to renew its fleet of single-aisle planes and add capacity for future expansion. Aegean picked Airbus in March last year for an order of up to 42 aircraft worth $5b in one of the biggest investments by a private Greek company since the country’s debt crisis erupted in 2010. The down payments are due from the first quarter through to the last quarter of 2023 for new generation A320neo and A321 Airbus jets. Deliveries of the new planes are expected to start in the first half of 2020 and conclude by the end of 2024.<br/>
star
The Indian government has approved the transfer of some of Air India’s debt and subsidiaries to a separate entity—an important step in the government’s latest effort to find a buyer for the airline. India’s cabinet, chaired by PM Narendra Modi, agreed to the establishment of a special purpose vehicle (SPV) called Air India Assets Holding. The SPV will be used to “warehouse” $4.1b of the airline’s debt, according to a government statement. The move is aimed at making Air India more appealing to potential investors. The government attempted to find a buyer for a 76% stake in the airline last year but was unsuccessful, with the carrier’s debt believed to be one of the main sticking points. The government is expected to make a fresh attempt to divest Air India later this year. In addition to the debt, several subsidiaries being held back from the main Air India sale process will also be transferred to the SPV. <br/>