- Images: Meet Navjot Singh Sidhu\'s glamorous daughter Rabia SidhuBigg Boss: Sonali, Gautam get cozy in bed, view picsAbhishek Bachchan\'s big brother is SRKRange Rover factory in China inauguratedRemedy on Dhanteras to become richRekha's vanity van tantrumsPICS: Celebrate eco-friendly DiwaliAamir, Ekta Kapoor to host Diwali card partyBill Clinton\'s Girlfriend Monica Lewinsky joins TwitterEngagement on cards for Anushka-Virat!
India's chief hockey coach Terry Walsh sprang a surprise by resigning from his post beca
Government helps Air India to pay debt Last Updated : 09 Oct 2012 11:11:34 PM IST File photo of Air India flight.
The government on Tuesday decided to guarantee Air India's non-convertible debentures (NCDs) worth Rs 7,400 crore, which will pave the way for the ailing carrier to pay off its short-term loans.
"The Ministry of Finance has approved the unconditional and irrevocable guarantee for Air India NCD bonds today for Rs 7,400 crore," an Air India spokesperson said.
Air India is burdened with a huge debt of over Rs 43,000 crore, which is a mix of long and short-term debt and working capital loans.
The airline will now credit rate the NCD bonds based on the guarantee issued by the government. The national carrier was banking heavily on NCDs sale to ease the interest cost on the expensive working capital loans.
"The proceeds of the NCD would be used to repay the short- term working capital facility availed by Air India from the 19 banks," the official said.
The debt-laden national carrier needed to issue the bonds as part of its financial restructuring plan but it had earlier hit a roadblock after the Finance Ministry refused to give "unconditional guarantee".
The NCD would have a tenure of 19 years and priced at a spread over the applicable government security. The government has capped the spread at 70 basis points, the official said.
" Air India would also be able to save on the interest cost by retiring this debt. The Banks would now have a reduced exposure to Air India after the said short-term loan is paid out by the national carrier," he said, adding the airline was targeting to achieve this within two to three weeks from the date of receipt of the sovereign guarantee.
Post Your Comment (0 posted):
Former cricketer and TV personality Navjot Singh Sidhu's glamorous daughter is an upcoming
- Toni Garrn enjoys Tennis with Leonardo
- Bigg Boss: Sonali, Gautam get cozy in bed, view pics
- Priyanka gives up Diwali celebrations
- Abhishek Bachchan's big brother is SRK
- When Randeep Hooda, Nandana Sen go nude for Kahe Sataye song from Rang Rasiya: Watch
- Kareena flaunts cleavage at IIFA 2014, view pic
- Rekha's vanity van tantrums
- Cop rescues Ashish Vidyarthi from drowning on set
In a spooky mix-up, a woman in the UK was horrified at receiving text messages from her de
Korean handset maker Samsung on Tuesday launched its most expensive device in the country