Air India to hire SBI caps for debt rejig

EXCUSIVE :National carrier Air India will be hiring SBI caps to advice them on debt restructuring.

| May 13, 2010, 06.06 PM IST

National carrier Air India will be hiring SBI caps to advice them on debt restructuring. The new finance sub committee which comprises of Anand Mahindra & Harsh Neotia which met last week had decided to restructure its debt.

Air India's working capital debt is a staggering Rs 17,000 crore for which it pays an average of 11 percent interest. Air India wants to bring this down to 8 percent. This would help the airline in saving up to Rs 450 crore every year. ‘Air India has an exposure to 12 banks for this debt.

The committee wants to bring down the exposure to 4 banks. This would also help in bringing down the interest we pay on the debt’ said an Air India official who did not want to be named.

Air India is seeking for a letter of comfort from the government. That will help the airline in negotiating with its current lenders. This latest move would be the first real test for the new board members.

Recently Air India took a bridge loan of $ 450 million from Standard chartered bank to fund the delivery three Boeing 777 aircraft.

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