AI lenders approve Rs 18,000 crore debt restructuring plan
Of the Rs 18,000 crore debt restructuring plan, Rs 7,400 crore worth of non-convertible debentures, guaranteed by the government, would be issued, banking sources said here.
They said the 13-bank consortium, led by State Bank of India, has also agreed to give Rs 2,200 crore worth of fresh working capital loan to the ailing national carrier.
The approval by the banks came ten days after a Group of Ministers, headed by Finance Minister Pranab Mukherjee, decided to allow Air India to raise Rs 7,400 crore by issuing sovereign guaranteed non-convertible debentures.
The debentures are likely to carry a coupon rate of 8.5-9 per cent and financial institutions may subscribe to these bonds, official sources said. This would be part of the national carrier's financial restructuring plan that was also approved by the GoM on February seven.
However,
the
bonds
issue
would
have
to
be
cleared
by
the
Union
Cabinet,
they
said.
Official
figures
show
the
debt-ridden
carrier
has
outstanding
loans
and
dues
worth
Rs
67,520
crore,
of
which
Rs
21,200
crore
is
working
capital
loan,
Rs
22,000
crore
is
long
-term
loan
on
fleet
acquisition,
Rs
4,600
crore
is
vendor
dues
besides
an
accumulated
loss
of
Rs
20,320
crore.
Banks and financial institutions had proposed several measures to beef up Air India's net worth and these were among the measures approved by the GoM, the sources said.
Air India's debt restructuring plan had hit a hurdle after the banks had refused to convert a part of the short- term debt into equity.As per the earlier plan, the banks were to restructure a debt of Rs 18,000 crore, of which around Rs 10,500 crore would have had to be converted into long-term loan with a repayment period of 10-15 years and the rest was to be converted into equity by banks.
The
banks
had
then
raised
objections
to
this
and
rejected
the
plan.
This
situation
had
prompted
the
GoM
to
permit
Air
India
to
raise
resources
through
bonds
or
non-convertible
debentures,
the
sources
said.
Besides permitting Air India to raise funds through the debenture route, the government is also likely to soon take a decision on infusing additional equity of about Rs 6,600 crore, they said.
PTI