Banks approve $ 3.5 b loan restructure for Air India

Reuters: A consortium of 19 banks, led by State Bank of India, has approved the financial restructuring plan of debt-laden state-run airline Air India, the Business Standard newspaper reported on Sunday.

The plan, which includes debt restructuring of 180 billion rupees ($ 3.53 billion) by the banks and a committed equity infusion by the federal government, will require the central cabinet’s approval, the report said citing unnamed officials.

Officials at Air India could not be reached immediately for a comment.

Of the debt being restructured, 105 billion rupees would be converted into a 10-15 year loans and the rest would be paid to banks through a government bond issue, the report said.

“The restructuring plan has been approved by the banks and we hope cabinet approval will come by the middle of April,” the report quoted an unnamed Air India official as saying.

“That will help reduce our interest outlay substantially in the first year, as we get a moratorium on the loan for the first year.”