Lenders of embattled national carrier Air India today approved its corporate debt restructuring plan involving Rs18,000 crore, and agreed to provide a fresh cash credit of Rs2,200 crore, according to reliable reports.
A consortium of 13 banks led by State Bank of India had earlier deferred the proposal as they were reluctant to accept equity in the airline. Now they have approved the airline's debt restructuring plan of around $400 billion by 20 March, says a CNBC-TV18 report.
The approval of the plan by the banks comes 10 days after a group of ministers headed by finance minister Pranab Mukherjee decided to allow Air India to raise Rs7,400 crore by issuing sovereign guaranteed non-convertible debentures.
The debentures are likely to carry a coupon rate of 8.5-9 per cent. They are aimed mainly at financial institutionsaccording to a PTI repor.
However, the bonds issue would have to be cleared by the union cabinet.
The debt-ridden airline is flying largely on taxpayers' support. It has outstanding loans and dues worth Rs67,520 crore, of which Rs21,200 crore is in working capital loans, Rs22,000 crore in long -term loan on fleet acquisition, and Rs4,600 crore in vendor dues.
This is besides an accumulated loss of Rs20,320 crore.
Banks had earlier refused to convert a part of the short-term debt into equity, but this hurdle now seems to have been crossed.