AI debt recast:Federal doesn't see much impact on balancesheet

Mumbai: Kochi-based private sector lender Federal Bank doesn't fear much impact on its balancesheet due to the proposed debt restructuring of Air India.
"We don't see much of an impact on our balancesheet after the proposed debt recast of Air India, as total provisioning for this will be only around Rs 4-5 crore," managing director and chief executive Shyam Srinivasan told PTI in an interview.
The bank, which has around Rs 400 crore exposure to the aviation sector, has Rs 320 crore exposure to Air India. The rest is to the private sector carrier Kingfisher Airlines, in the form of a bank guarantee to Hindustan Petroleum.
The oil company encashed the cheque recently when the airline failed to pay up its fuel bills.
A few days ago, group of ministers (GoM) led by finance minister Pranab Mukherjee allowed Air India to raise Rs 7,400 crore by issuing government-guaranteed bonds or by other means (subject to cabinet clearance) as a part of the recast plan for around Rs 18,000 crore of its short-term debt.
12/02/12 One India

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Categories: Air India Feb 2012