A group of lenders to ailing Air India have turned down the national carrier‘s proposal to recast its Rs 9,000 crore debt by converting half of it into equity.
A group of lenders to ailing Air India have turned down the national carrier’s proposal to recast its Rs 9,000 crore debt by converting half of it into equity. Air India, which owes banks Rs 46,000 crore had asked for equity swap to ease debt woes, but the consortium termed equity stake in the airline as a ”burden”, according to a report in The Financial Express.
“We are not keen on acquiring an equity stake in the company, it would be a burden on us,” a senior banker told the paper, adding that Air India has been informed about it.
Air India had asked banks to rejig its long-term debt of Rs 9,000 crore through the Scheme for Sustainable Structuring of Stressed Assets (S4A). Lenders, however, seem unsure about Air India’s future and are unwilling to be pressured into holding equity, according to the report.
Despite efforts to bring out of turbulent weather, Air India has not clocked any profits in about 10 years, barring FY16 when it posted an operating profit of Rs 105 crore, but a net loss overall.
An aviation ministry official told the paper that the loan recast proposal was shelved by bankers at a meeting last month, adding that the government would look to reassure lenders about the plans to revive the airline.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.