Shishir Arya, TNN | Sep 12, 2011, 04.04AM IST
NAGPUR: Aero Turbines India Ltd, which had earlier planned to set up a maintenance repair and overhaul (MRO) depot at the Mihan-special economic zone (SEZ) but had put the venture on hold, now appears ready to go-ahead with the project.
The company had earlier tied up with Duke Equity and funds were supposed to be sourced from the US. The partnership, however, did not work out as funds could not be arranged on account of 2008 recession. This left Aero Turbines looking for new allies in the venture.
It had obtained a letter of intent from Maharashtra Airport Development Company (MADC), the SEZ's developer, for allotment of land but had not gone ahead with formalities pending arrangement of finances. It obtained an in-principle approval from lenders last week for Rs 120 crore loan. The deal with the private equity financer is nearing finalization too. Hence, the company plans to get the land allotted. The company will be acquiring 36 acres in the SEZ.
"With a change in allies, the land will be acquired under a new name Aero Facility India Pvt Ltd. The new entity will be incorporated soon with Aero Turbines as the promoters," said Ajit Karnik the chairman of Aero Turbines. He mentioned in-principle approval of loan by bankers and an equity infusion of Rs 60 crore from a sovereign wealth fund but refused to divulge the names citing business interests. The lenders are a public sector bank and the sovereign fund is based in middle-east, was all that Karnik would say.
Karnik claimed the fund normally did not partner with a start-up venture but Aero Turbines has been an exception. It will exit after four years when the company will go public, he said.
"Although it may take another four to six weeks for the bankers' due diligence to be completed, the company will go-ahead with acquisition of land in a week. Since the company is confident about the funds' tie-up it will not wait until a formal approval is received. The construction work is expected to begin in a couple of months or so," said Karnik.
The venture would initially focus on airframe maintenance and later expand. The MRO is designed to handle five narrow bodied aircraft of Boeing 737 and Airbus 320 family but can also accommodate one wide-bodied plane at a time. If everything works out, this will be the second MRO in the SEZ to begin work. Boeing, which is setting up the facility for Air India, has already started the work. Max Aerospace, another aircraft maintenance company, has been allotted 15 acres. It has proposed to start work in a part of the land, added a source in the MADC.
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