Saturday, March 25, 2017

SBI mulling Air India request to reduce interest rate

New Delhi: In order to provide some relief to the debt-laden Air India, the country's largest public sector bank, State Bank of India (SBI) and its other consortium lenders are considering the request of the airline's chief to cut the interest rate on its borrowings. Ashwani Lohani, chairman and managing director of Air India, in a letter to SBI requested the lender to link the interest rate to marginal cost of fund-based lending rate (MCLR) from the existing base rate. "The reduction of interest rate to 8.5 per cent from 10.05 per cent will provide the much needed relief. The alignment of interest rates would accrue a savings in interest of around Rs.200 crore annually on the total loan base of around Rs.15,000 crores," it said.

 The government is making all attempts to turn around the airline's fortunes. Officials in the finance ministry also said it has also sought support from the government in terms of sovereign guarantee to convert its long-term working capital of Rs.10,500 crore into non-convertible debentures (NCDs) with 10-15 year duration.

As part of the airline's revival plans, it is trying to monetise its assets. Officials said, "A list of 38 properties has been forwarded to NBCC. Out of the 38, NBCC has identified 21 properties whose valuations are completed and Air India may sell directly. However, the e-auction process will start after getting the fresh valuation done." The official added that a second list of 28 properties have been forwarded to NBCC for their scrutiny and advice on monetisation.
24/03/17 Statesman