Air India, lenders clinch debt restructuring plan
21 Oct 2011
New Delhi: National carrier Air India may have secured agreements from lenders on a debt-restructuring plan that will reduce interest payments for the financially strapped carrier by Rs1300 crore ($266 million) a year, according to fresh reports.
If confirmed, then the state-owned carrier's interest costs will come down to about Rs2100 crore ($429 million) a year from Rs3400 crore ($695 million) at present.
A group of ministers (GoM) panel is likely to ratify this agreement.
Reports also suggest that the plan includes converting about Rs18000 crore ($3.68 billion) of short-term loans into longer-term debt and preferred shares.
The airline is also likely to seek Rs6500 crore ($1.33 billion) from the government before the end of financial year next March as it seeks ways and means to pay up money for 111 planes it has ordered from Airbus and Boeing.
Interest payments on debts, totalling Rs44200 crore ($9 billion) as of 31 March, account for about 30 per cent of the airline's annual costs.
