Air India Ltd., the carrier which pays more interest on its debt than any publicly traded Asian airline, plans to borrow $300 million from overseas to repay costlier rupee obligations, according to a company official.
The carrier is in discussions with two overseas lenders, including one in the U.K., said the official, who asked not be identified as the person is not authorized to speak to the media. The dollar-denominated loan will carry an interest rate of 300 basis points over the London interbank offered rate, the official said. The three-month dollar Libor rate was unchanged at 0.274 percent yesterday. That compares with about 10.5 percent the carrier pays for rupee loans, the official said.
The former monopoly, which paid 34.8 billion rupees ($634 million) as interest in the year ended March 31, is cutting costs and resuming Boeing Co. 787 flights to regain market share. Competition is intensifying on overseas routes after Etihad Airways PJSC agreed to buy a stake in Jet Airways (India) Ltd. Air India, bailed out by the government four times in as many years, needs to lure more customers to continue getting state funds, said Civil Aviation Minister Ajit Singh.
17/05/13 Karthikeyan Sundaram/Bloomberg.com
