Distressed airlines may get a new line of funding from foreign lenders, as the government is mulling opening up the external commercial borrowing (ECB) route for them to raise The has sought the intervention of the finance ministry to allow airlines to tap foreign funds.
“Airlines, in their correspondence with the government, have requested that since aviation has become a primary mode of transport and an imperative part of the infrastructure, they should be given benefits such as access to ECB for We have written to the finance ministry asking for it,” said a senior ministry official.
The ministry has also asked that the cap of such borrowings is to be set at $500 million (Rs 34.5 billion) for a single firm and $1 billion (Rs 69 billion) for the entire sector. “Some airlines such as Jet Airways and IndiGo had demanded that the cap be higher, so we have asked for it,” the official said.
A Reserve Bank of India (RBI) spokesperson did not respond to queries.
ECBs are loans raised by an Indian corporate entity from a foreign commercial bank or alternate financial institutions to be used for commercial purpose such as capital expenditure.
17/12/18 Canton Caller
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“Airlines, in their correspondence with the government, have requested that since aviation has become a primary mode of transport and an imperative part of the infrastructure, they should be given benefits such as access to ECB for We have written to the finance ministry asking for it,” said a senior ministry official.
The ministry has also asked that the cap of such borrowings is to be set at $500 million (Rs 34.5 billion) for a single firm and $1 billion (Rs 69 billion) for the entire sector. “Some airlines such as Jet Airways and IndiGo had demanded that the cap be higher, so we have asked for it,” the official said.
A Reserve Bank of India (RBI) spokesperson did not respond to queries.
ECBs are loans raised by an Indian corporate entity from a foreign commercial bank or alternate financial institutions to be used for commercial purpose such as capital expenditure.
17/12/18 Canton Caller
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