Air India has launched the first tranche of its Rs 7,400 crore 19-year bond sale. The R500 crore tranche, launched in the morning, is being placed with the Employees’ Provident Fund Organisation (EPFO).
A second tranche of R300 crore will be placed with India’s largest insurer LIC. The remaining bonds will also be placed with these two state-owned investors over the next couple of days. Private placement to these two investors has surprised the industry which was waiting for the bond sale for months. The sale is the biggest ever for the country and an important milestone in Air India’s restructuring but it has been pushed back several times since August. The delay was because the firm was not given unconditional guarantee by the government. A guarantee from the government did come on September 18 but it had conditions stipulating the company had to meet certain milestones for its performance every five years.
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