Air India short term debt gets govt backing
New Delhi: 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.
Reuters
“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.
(Continued)
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