The total acquisition cost is pegged at $7 billion. The company had earlier taken a loan of  $429 million from an IDBI-led consortium.

The US Exim Bank would offer guarantee for this loan and a sovereign guarantee is expected to follow suit soon.

The airline is in the process of preparing a detailed application to the US Exim Bank for a preliminary commitment for the guarantee, which would be later converted into a final commitment.

Air-India is also planning to raise $200 million commercial loan to finance the mega fleet acquisition. Sources said the US Exim Bank guarantee facility would be amortised over 12 years while the commercial loan would be repaid in five years.

Confirming the development, S Venkat, Company Secretary, Air India said the airline would soon invite request for proposals from domestic as well as foreign banks.

"We would invite bids from finance houses and post RFP and other details on our website," Venkat said.  Air-India and Boeing Company had signed purchase agreement for 68 Boeing airplanes.

Out of this, three B777-200 LR, three B777-300 ER and10 B737-800 are scheduled for delivery in 2007.

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