Bankers, AI restructuring meet inconclusive
08 April 2011
Mumbai: A consortium of domestic banks, which have lent huge sums of money to struggling flag carrier Air India (AI), said today they expect to settle on a turnaround strategy for Air India within three months. These comments were made after a meeting with AI management in Mumbai.
It is being given to understand that at the meeting a consortium of 10 banks and AI's management were given a presentation by SBI Caps and international consultants Deloitte. The banks will now mull over the presentation and arrive at final strategy which will allow the state-owned carrier to service its debts without going under.
Bank representatives said they expect a second round of meetings in 10 days' time.
The a general feeling was that the banks are by and large comfortable with the proposals put forward by the two consultants and may only have minor issues to sort out.
When queried if the debt restructuring would involve just the working capital part of the loan (Rs18,000 crore) or the entire loan component of Rs40,000 crore, bank representatives said they would have no problem in restructuring the entire Rs40,000 crore debt.
They pointed out that the carrier, to date, had not defaulted on a single payment.
Bank representatives said once the lenders and the company management agreed on a final proposal, it would then be forwarded to the government and the Reserve Bank of India the carrier's turnaround plan would then be in motion.
AI management were not available for comment.