AI briefs lenders on revamp plan

New Delhi: A group of 20 banks to which Air India owes money are to form a committee to discuss its turnaround plan. They hope to agree on the final details within three months.
The airline management shared the plan details (which the civil aviation ministry has approved) with the bankers in Mumbai on Friday. “The bankers were satisfied and decided to form a committee to discuss it at their level. They have assured us that they will come back to us soon,” said an AI official, who did not want to be identified.
The official added the committee would have bankers that had each lent at least 10 per cent of the total debt.
“It was a preliminary meeting. We cannot share the details. We will be meeting them many more times. Once we lenders and the company management agree on the final proposal, it will go to the government and Reserve Bank and then we will have the turnaround plan rolling,” said Punjab & Sind Bank general manager H P Singh.
AI’s debt is Rs 40,000 crore. Of this, working capital debt is Rs 21,000 crore and the rest are loans taken to fund aircraft acquisition. The working capital debt is high-cost, with an interest rate of 12 per cent.
“It was the first meeting that all the lenders had with the AI management. SBI Caps and Deloitte made a presentation to us. We have to get back to them with our views. Hopefully, we will have the second meeting in 10 days," Bank of Baroda general manager Arun Tiwari said.
09/04/11 Business Standard

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Categories: Air India Apr 2011