The debt laden airline Air India tracks on the external commercial borrowing (ECB) route, raising funds as acted upon just after two days of the government recommendation over turnaround and a financial restructuring plan (FRP).
As per report, around $ 1 billion cash annually in form of loans has allowed it to borrow across the nation or oversea markets to raise liquidity as working capital.
AI was in wait of govt’s this approval of Rs. 30,000-crore equity infusion over the next eight-year period and a debt recast (CDR) of Rs. 21,200 crore. And finally it got and that would help it to procure cash flows either fixed or float for at least one-year period.
The cash scrapped national carrier is also open ways for merchant bankers by inviting to offer structured financing package which reduces the financing cost, says the offer document.
This process is seeking to smooth the operational services of AI that ultimately adding floating capital reserves.
Earlier last month of March, under the turnaround plans, AI contracted with 19 bank consortium associate by SBI over the master restructuring agreement, the working capital facility agreement, the appointment of facility agent agreement and the appointment of trustee agreement, source said.
The strong and appreciable step that AI will have to take is to raise its non-convertible debentures (NCDs) worth Rs. 7,400 crore to its lenders.
AI is facing financial crisis of Rs. 67,520 crore dues and Over all matter will be going to transit Rs. 11,000 crore loan of working capital into long-term debts and surely reduce outstanding debts of the banks as interest payment.