Lenders finalise debt rejig plan for airlines

Mumbai: Leading Indian banks that have lent to the cash-strapped aviation sector have finalised a three-pronged strategy for the Reserve Bank of India (RBI) to restructure the ballooning debts of most airlines.
The debt restructuring initiatives include a two-year moratorium on short-term debt, better interest rate and conversion of a part of debts into external commercial borrowings (ECBs) or cumulative convertible preference shares (CCPS).
These initiatives will help the country’s three biggest carriers — Air India, Kingfisher Airlines and Jet Airways (India) Ltd — which control 65 per cent of domestic passenger traffic but have a combined debt of Rs 63,045 crore ($13.5 billion). The Indian Banks’ Association (IBA), the umbrella body for the industry, would send a letter to RBI, suggesting the strategy, three independent lenders told Business Standard, on condition of anonymity.
29/07/10 Arijit Barman/Business Standard

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Categories: Indian Aviation- In General Jul 2010