Mumbai: Life Insurance Corporation, retirement funds of state-owned banks and public sector organisations will have to step in with cheque books for Air India if the government dictates the price at which the national carrier sells bonds.
In the next few months, Air India will float Rs 7,400-crore non-convertible debentures backed by sovereign guarantee. Top sources told ET that the government, which may have to eventually shoulder the interest burden, has indicated that the bond interest should be fixed as low as possible.
For all guaranteed offerings, issuers have to take government's approval on pricing. Saddled with debts, the government often insists on interest rates that are well below what private sector ihalnvestors' demand. And when the finance ministry digs in heels on bond pricing, government-owned institutions are left to bail out an issue.
16/04/12 Sugata Ghosh & Manisha Singhal/Economic Times
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment