IndiaCatalog.com
India News
Search Web Directory
News Home
Banking on banks: Air India SPV seeks to lower debt burden
Posted on 23rd April 2019
Since the Rs 29,464-crore Air India working-capital debt taken over by it is backed by a sovereign guarantee, the Centre’s special purpose vehicle Air India Assets Holding (AIAHL) is set to ask banks to cut interest rate on bulk of the loan to about 8.5% from 10.5-11% now.

The shifting of this debt to AIAHAL from the carrier was one of the steps taken to make the airline attractive to potential buyers.

“The AIAHL will negotiate for restructuring and refinancing of the costly debt,” an official said on the condition of anonymity.

The move could help reduce the interest burden on AIAHL by about Rs 300-400 crore per annum, as some Rs 15,000 crore of high-cost debt could be recast. However, it is not obligatory on banks to cut the interest rate.

A favourable deal from the lenders will hinge on the Centre’s persuasive powers and the discretion of the bank managements.

There are over a dozen lenders of working capital to Air India, including State Bank of India.

As part of the strategic disinvestment plan of Air India and Air India Express, the Cabinet on February 28 gave its approval for the AIAHL for warehousing of AI’s accumulated working capital loan not backed by any asset along with four subsidiaries (Air India Air Transport Services, Airline Allied Services, Air India Engineering Services and Hotel Corporation of India. Non-core assets such as paintings and artefacts and other non-operational assets of AI have also been kept with the SPV with a mandate to monetise them. As per the audited accounts of 2017-18, the total debt of AI was Rs 55,308.52 crore.

The board of directors of the SPV, incorporated in January 2018, includes CMD of AI and departmental joint secretaries of civil aviation, expenditure, economic affairs, DIPAM and director(finance) AI.

The interim Budget for 2019-20 has allocated Rs 2,600 crore to service the debt housed in the SPV. The proceeds from sale of non-core assets (worth Rs 5,000 crore) and subsidiaries would be used to repay the loan. Also, the proceeds from sale of AI and AI Express, when materialises, would be used to repay the loan.

The strategic disinvestment process for the carrier is likely to start afresh once a new government is formed after the elections next month. In June 2018, the government called off the proposed sale of a 76% stake in AI after no buyer showed interest.

AI losses are expected to widen in 2018-19 due to increase in aviation fuel costs. It made a loss of `3,500 crore in the first six months of 2018-19. Its losses stood at `6,453 crore in 2016-17 and `5,348 crore in 2017-18.

Related Companies: Air India   

Other Latest News
Cipla shareholders approve proposal to raise up to Rs 3,000 crore
Posted on 17th August 2019
Drug major Cipla on Saturday said its shareholders have approved a proposal to raise up to Rs 3,000 crore through issuance of equity shares or other securities convertible into equity shares.

Drug major Cipla on Saturday said its shareholders have approved a proposal to raise up to Rs 3,000 crore through issuance of equity shares or other securities convertible into equity shares.


Two RCom promoters pledge 11.5% more stake in Axis Trustee services
Posted on 17th August 2019
Two promoter entities of Reliance Communications (RCom) have pledged 11.5 per cent more stake in favour of Axis Trustee Services, according to regulatory filings.

Reliance Communications Enterprises and Reliance Telecom Infrainvest on August 16 pledged about 11.51 per cent of their holding in Reliance Communications amounting to 31.82 crore shares in favour of Axis Trustee Services acting as security/debenture trustee.


M&M sets up first car assembly plant in Sri Lanka with Ideal Motors
Posted on 17th August 2019
Mahindra & Mahindra (M&M), along with its local partner in Sri Lanka Ideal Motors, has set up the island nation's first passenger car assembly plant.

The Indian carmaker has set up a joint venture with Ideal Motors, its dealer partner in Sri Lanka for 10 years. The 65:35 JV between Ideal Motors and M&M is christened Mahindra Ideal Lanka Private Limited, which will operate the assembly plant at Welipenna, about 60 km from Colombo.


Sebi imposes restrictions on mutual fund investments in short-term bank deposits
Posted on 17th August 2019
NEW DELHI: Mutual fund houses should ensure that banks -- where a scheme has parked funds in the lender's short-term deposits -- do not invest in that particular scheme, according to Sebi.

The markets watchdog has issued a clarification regarding 'parking of funds in short-term deposits of scheduled commercial banks by mutual funds -- pending deployment'.


Restrictions lifted, landline services partially back in Valley
Posted on 17th August 2019
Srinagar: Restrictions on the movement of people in the Kashmir Valley were eased on Saturday, with landline services restored in some areas of the city, even as stringent security arrangements continued to be in place, officials said.

Seventeen out of a little over 100 telephone exchanges were made operational. These exchanges are mainly in Civil Lines, Cantonment and the airport area of Srinagar district.


» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Cootera.com Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Banking on banks: Air India SPV seeks to lower debt burden
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Name*
Comments*
Security Code*
 

Be the first person to write a business review for Banking on banks: Air India SPV seeks to lower debt burden

Most Read News

IOC to invest Rs 2 lakh cr to expand operations

Bharti Airtel, Vodafone Idea shares tumble after Mukesh Ambani announces Reliance Jio’s ambitious plan

Sensex sinks over 300 points; metal, auto stocks drag

Aramco to invest $15bn in Reliance Industries Limited

Yes Bank shares fall to 5 year low; board’s capital raising committee to consider issue price on Aug 14

More India News

  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
Home
About us
Link to us
Advertise
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2019 IndiaCatalog.com
    All Rights Reserved
Privacy Statement