Air India lenders agrees to subscribe to Rs 7,400 crore AI bonds

Air India's lenders have agreed to subscribe to Rs 7,400 crore bonds issued by the debt-laden airlines as an interim arrangement, while giving an in-principle nod to a revised debt recast package, said senior bank officials.
The bonds will be offloaded in favour of mutual funds and insurance companies after about six months, the officials said.
"State Bank of India (SBI) informed lenders that it will take at least six months to complete formalities regarding government guarantee on the bonds," said a bank official, who was present in a meeting between the lenders and the airlines.
"SBI has suggested that the bonds could be subscribed by banks immediately and subsequently offloaded to other intermediaries like mutual funds and insurances companies," said the official, who did not want to be named.
A Cabinet of ministers has approved issuing guarantee on the Air India bonds. However, the government will have to make provisions for the same, which will happen in the forthcoming Union Budget.
18/02/12 Economic Times

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Categories: Air India Feb 2012