IndiGo inks $2.6 bn deal with Chinese bank ICBC to finance 30 new planes

New Delhi: Budget airline IndiGo has signed a $2.6 billion deal with Industrial and Commercial Bank of China Ltd (ICBC) for the lender to finance more than 30 new aircraft, the carrier said in a statement on Wednesday.

The announcement comes on the day Chinese President Xi Jinping arrived in India, where the two countries are expected to sign trade and investment deals worth billions of dollars.

The airline told CNBC-TV18 that there are no immediate plans of going public.

Under the memorandum of understanding, ICBC will provide IndiGo, India’s largest airline by market share, with financing for the planes through either a sale and leaseback, financial lease or commercial lending deal, IndiGo President Aditya Ghosh said in the statement.

Privately owned IndiGo said it will use the deal to add Airbus A320 planes to its fleet.

The majority of IndiGo’s fleet is financed through sale and leaseback agreements - under which a third party owns the planes and then rents them to the airline - and is one factor analysts say has helped keep the airline profitable while India’s other big carriers lose money in a highly competitive market.

IndiGo, owned by InterGlobe Enterprises, is planning on listing on the Mumbai stock exchange next year, people involved in the deal previously told Reuters.

Reuters