Air India seeks ministry nod to issue Rs.5,500 crore bonds

New Delhi: National carrier Air India Monday said that it has sent a proposal to the civil aviation ministry for permission to raise Rs.5,500 crore by issuing bonds to a consortium of banks, to help restructure its long-term debts.
"We have sent a proposal to the ministry a week back to seek their approval on the issue," a senior Air India official, who did not want to be named, told IANS.
According to the official, the proposal seeks to raise about Rs.5,500 crore through the 15-year bonds which would be issued to the consortium of banks.
"This Rs.5,500 crore will help us in many ways. First, it will ease our working capital requirement, and most importantly help us in restructuring our long-term debts, thereby increasing our savings."
The move, which is a component of the company's turnaround plan, envisages to save Rs.180 crore in interest payments it makes on a part of Rs.40,000 crore loans it took for aircraft acquisition and working capital requirement.
Air India's cumulative interest per annum accounts of Rs.3,200 crore, including Rs.1,800 crore for the 111 aircraft which it ordered since 2006.
Earlier, Air India chairman and managing director Arvind Jadhav said the revival plan will focus on equity infusion, shift to long-term loans, interest cuts, making repair and ground-handling operations into separate entities, and resolving integration issues.
16/05/11 Times of India

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Categories: Air India May 2011