Unable to get a single bid from banks for more than a month to raise Rs 500 crore, debt-struck national carrier Air India has extended the deadline of its tender till October 31. The airline officials met the bankers last week to provide them with more clarity on the company’s disinvestment and revival package plans. The bankers also flagged worries related to development in the power sector after Allahabad High Court refused to offer any relief to power plants from RBI’s new guidelines for resolving bad loans, The Indian Express reported citing unidentified senior Air India official.
“We met many bankers. The banks’ exposure to Air India is high and they also wanted to know details about the disinvestment plan and the revival package, due to which there was a level of uncertainty. There were questions about the February 12 circular as well in context of the power sector but Air India is clear,” The Indian Express reported citing the unidentified official.
It was in the month of September that Air India issued a proposal asking for bids from banks in order to raise a short-term loan of Rs 500 crore, exhausting its government guarantee of Rs 2,000 crore. The national carrier took the remaining Rs 1,500 crore government-backed loan in the month of August from Bank of Baroda so as to regularise its accounts to stop them from turning into bad loans as per the guidelines introduced by the RBI on February 12.
The airline plans to raise fresh Rs 500 crore so as to meet the immediate capital requirements and also for repaying part of the interest on the government guaranteed non-convertible debentures of Rs 7,400 crore.