Air India, bank consortium to sort out debt servicing issues

New Delhi: The management of struggling flag carrier Air India is due to meet a consortium of banks in Mumbai today in an attempt to find ways to service the carrier's massive debts.

"We will be meeting the bankers' consortium tomorrow. We will have to see what is the debt and how much is to be converted and how that is to be done," Air India CMD Arvind Jadhav informed media sources here.

The airline is saddled with a debt of about Rs40,000 crore, of which Rs18,000 crore are loans for working capital loans taken from a consortium of banks and the balance Rs22,000 crore taken to fund purchase of new aircraft.

Replying to questions, Jadhav said, "If the government does it (servicing debt), then there is no problem. But if we have to service our debt on our own, then we have to work with the financial institutions. The government and the FIIs have to be on the same page".

Just last month AI accepted a corporate debt restructuring (CDR) package prepared by SBI Caps and vetted by global consultancy firm Deloitte. The package was cleared after several rounds of consultations with banks and the government.

"We are going to meet the banks consortium and will soon announce the details," Jadhav said.