Noida Airport: Zurich May Infuse Rs 800 Crore Upfront | News from Noida
The company said on Monday that its term loan proposal had been rated “stable” by India Ratings and Research Pvt Ltd, a credit rating agency. According to the plan, the project will be financed at a debt-to-equity ratio of 65:35. This means that of the Rs 5,730 crore required for the first phase, Rs 3,724 crore would be raised by debt and Rs 2,006. crores remaining as equity. On the lower amount, Zurich will have to clear Rs 800 crore in advance. It is estimated that 44% of the hard cost would be used for the terminal.
The Zurich subsidiary, Yamuna International Airport Private Limited (YIAPL), must be handed over 1,334 hectares before construction can begin. The district administration launched the process of rehabilitating families affected by the project in Jewar Bangar last week. Sources said authorities would be able to hand over the land to YIAPL in 3-4 months. Once YIAPL obtains all the land and its appointment date is set, the agency will have three years to prepare the airport for commercial operations.
Officials said the airport would operate with the “hybrid at the cash” model, which was introduced to the country’s aviation sector in 2016. Under this approach, only up to 30% of non-aviation revenue , such as those for parking, rentals, food and drink can be used to subsidize aviation charges. While noting Zurich’s term loan proposal, the agency believed the hybrid cash model would bode well for the company.
Arun Vir Singh, managing director of Noida International Airport Limited, the government’s special vehicle for building the airport, said the debt structure was financially viable for all stakeholders. “It also shows the state government’s determination to accelerate large-scale projects in the UP,” Singh added. The repayment term of the term loan should be between 14 and 18 years.