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
EC rejects Opposition's demands concerning EVMs
Posted on 22nd May 2019
New Delhi: The Election Commission of India (EC) has rejected the demands of the opposition regarding Voter Verifiable Paper Audit Trail (VVPAT) on Wednesday.

The issue to change the protocol for counting was discussed by the Chief Election Commissioner Sunil Arora at his meeting with election commissioners Ashok Lavasa and Sushil Chandra.


Big PSU bank merger on cards if Modi wins 2019 election; PNB may merge these banks with itself
Posted on 22nd May 2019
The government is planning to merge state-run Punjab National Bank with two other PSU banks — Oriental Bank of Commerce, Andhra Bank and Allahabad Bank after the new administration is in place following the 2019 Lok Sabha elections, Reuters reported citing unidentified sources. This is in a bid to keep 5-6 larger banks in the country, which the ruling Narendra Modi-government has been advocating for some time.

YES Bank begins provisioning for exposure to ADAG, Essel group firms
Posted on 22nd May 2019
YES Bank, which has exposures to Anil Ambani's Reliance group and Essel group companies, has started making provisions for loans given to both entities. The provisioning began after rating agencies downgraded debt instruments of both groups.

YES Bank has an exposure of Rs 13,000 crore to Reliance group entities and another Rs 3,300 crore to Essel group companies, according to analysts.


Reliance tops IOC in sales
Posted on 22nd May 2019
Reliance Industries has toppled state-owned Indian Oil Corporation (IOC) to become the country’s biggest company by revenue.

In 2018-19, Reliance has reported a turnover of Rs 6.23 lakh crore. In comparison, IOC posted a turnover of Rs 6.17 lakh crore for the fiscal, according to regulatory filings by the two companies.


Sensex rises over 150 points; Nifty tests 11,700
Posted on 22nd May 2019
The benchmark BSE Sensex jumped over 150 points in early trade on Wednesday, led by gains in oil and gas, banking and IT stocks, ahead of the general election results.

The 30-share index was trading 157.51 points, or 0.40%, higher at 39,127.31. In similar movement, the broader NSE Nifty rose 30.90 points, or 0.26%, to 11,740. In the previous session, the Sensex ended 382.87 points, or 0.97%, lower at 38,969.80, and the Nifty plunged 119.15 points, or 1.01%, to 11,709.10.


» 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

Slow income growth impending deposit growth: RBI study

Vodafone Idea to do away with all low Arpu subscribers by May end

Infosys to allocate up to 50 mn shares to incentivise staff

Sensex, Nifty start on a positive note amid firm global cues

ICICI-Videocon loan case: Chanda Kochhar, husband appear before ED again

More India News

Photo Gallery

Yamaha Alpha(10 Images)Yamaha Alpha.
  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