Adani APSEZ adds new Aircraft Leasing Unit in GIFT City

Source: India Shipping News

AHMEDABAD: Adani Ports and Special Economic Zone (APSEZ) has announced the formation of a wholly-owned subsidiary company named Udanvat Leasing IFSC Unit. The main objective of this company is to own and lease aircraft.

The company revealed this information in a filing to both the BSE and the National Stock Exchange of India.

Adani’s aviation ambitions The Adani Group already has a significant presence in the Indian aviation sector, managing seven airports across the country.

These airports are Ahmedabad, Mumbai, Jaipur, Thiruvananthapuram, Guwahati, Lucknow, and Mangaluru. This operation is carried out through its subsidiary, Adani Airports Holding.

The filing further states, “Udanvat is incorporated in Gujarat International Finance Tec-City (GIFT City), Gandhinagar, Gujarat, India, and registered with the Registrar of Companies, Gujarat at Ahmedabad on October 23, 2023.” 

GIFT City’s role GIFT City, as India’s exclusive International Financial Services Centre (IFSC), works with the International Finance Services Centres Authority (IFSCA) to make India a major hub for aviation financing and aircraft leasing. This effort aims to attract airlines and lessors from traditional leasing hubs such as Dublin and Singapore.

An example of this initiative is Air India’s purchase of India’s first Airbus A350-900 aircraft in September 2023, facilitated through a finance lease transaction with HSBC via GIFT City.

Also, IndiGo is in the process of finalizing a similar transaction through GIFT City, with the financial support provided by the Bank of China.

However, it’s important to note that aviation finance and aircraft leasing in India remain complex and challenging due to the incomplete implementation of the international law established by the Cape Town Convention.

This convention protects the rights of lessors and creditors in case of adverse situations but is not yet fully enforced in India.

MCA Exemptions In a welcome development, the Ministry of Corporate Affairs (MCA) recently granted an exemption for transactions or agreements governed by the Cape Town Convention concerning aircraft, aircraft engines, airframes, and helicopters.

These exemptions specifically exclude such transactions from the limitations of moratorium provisions as defined in Section 14(1) of the Insolvency and Bankruptcy Code, 2016.