LIC, EPFO buy Rs 7K cr Air India bonds
The debt include those taken for purchasing 27 Boeing Dreamliners, of which only three have been delivered so far, and nearly 60 other planes from Airbus.
The issue has a AAA rating from India Ratings, the domestic services of Fitch, reflecting the unconditional guarantee extended by the government to make timely repayment of principal and interest on the bonds.
India Ratings had said in a statement, "The proceeds of this NCD issue will be used to repay outstanding Rs 73,91.67 crore short-term bank loans, interest thereon, as well as expenses in relation to the issue of the debentures and the government guarantee fee as may be applicable."
The NCDs were issued early this month and have a tenor of 19 years, with principal redemption in five equal instalments starting from the 15th year and interest payments being made biannually, the rating agency said.
The NCD issue is a part of the government's restructuring plan for reviving the airline. The Cabinet Committee on Economic Affairs had on April 12 approved a financial restructuring plan for the airline, which included the issuance of the NCDs.
The bonds will be issued in three tranches -- Series I of Rs 3,000 crore, Series II of Rs 1,000 crore, and Series III of Rs 5 crore, according to India Rating.
In all three tranches the issuer has the option to retain additional subscription such that the total amount mobilised does not exceed Rs 7,400 crore, the agency added.
The airline has to
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