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. Last Updated: 07/27/2016

Indian Firm Purchases 50% of Kyrgyz Airline

Promising to boost tourism in Kyrgyzstan with $50 million in investments, an Indian trade company has bought half of the Kyrgyz national airline.

Inder Mohin Singh Oberoi, president of the Oberoi Group of Companies, said in an interview this week that he had signed two agreements late July with Kyrgyz government officials for obtaining a 50-percent share in the international operations of Kyrgyz Airlines, as well as a 50-percent share in a hotel in the capital of Bishkek.

Oberoi will invest $15 million into upgrading the airlines and $35 million into reconstruction and exploitation of the hotel, Oberoi said.

It is virtually unheard of for a foreign company to obtain such a large share in a national airline, and Oberoi said it was one of the largest deals ever made by an Indian citizen.

Oberoi plans to use some of the aircraft for flights between south Asia and the Persian Gulf region, with connecting flights to Europe. Oberoi said there were no restrictions in the agreement on the number of planes he could use outside Kyrgyzstan, out of a fleet of close to 30 large aircraft, 50 helicopters and a fleet of smaller planes.

Some planes will be stationed in Bahrain or elsewhere in the Gulf region, the small planes will be used there for irrigation, Oberoi said.

Oberoi said he owns a domestic airline in India and has been looking for a way to go international, particularly in the Gulf region. "That's a ready market", Oberoi said.

In return for use of these planes, the company promises to improve maintenance, equipment and marketing for flights in and out of Kyrgyzstan, including flights to Moscow that will compete with Aeroflot, Oberoi said.

Oberoi said he would use his share in the airline to boost tourism in Kyrgyzstan by attracting wealthy Arabs and south Asians for skiing and hunting trips. That is where the hotel comes in. Now a dilapidated hotel in the Kyrgyz capital of Bishkek, it will be reconstructed into a Western-style hotel with its own helicopter pad, golf course and casino, Oberoi said.

The company is setting up tenders for the reconstruction and management for the hotel, which should be fully operational in two years but will take in its first guests while construction is still in process later this year, Oberoi said.

The Kyrgyz government has guaranteed all $50 million in investment, he said. Government officials could not be reached for comment.