Air India takes short-term loan to finance 787 and 777 planes
Air India said on Wednesday it was once again looking to refinance a foreign currency bridging loan that has been used to pay off some of its Boeing 777s and 787s. The airline is looking to raise $ 824.7 million by the end of the month. . Meanwhile, the deadline for government submissions on its national airline has been extended until the end of December.
On Wednesday this week, Air India announced in a tender letter that it planned to raise ₹6,150 crore ($ 824.7 million) through short-term loans from domestic lenders. The airline said it hoped to get the loans by the end of the month. The funds raised will go to the refinancing of international bridging loans previously contracted for the purchase of a Boeing 777 and six 787 planes.
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Aircraft under warranty
As reported by Living mint, Air India will offer planes, including the aforementioned models, as collateral for the loans. Under these conditions, the airline established an ambitious plan to repay the entire loan in one year.
Meanwhile, this is not the first time that Debtor Air India has sought new loans for its purchase of Boeing jets, for which it has yet to secure long-term financing. Almost exactly a year ago, according to the Economic time, the Indian flag bearer also sought to ₹5800 crore ($ 819 million).
Extended submission deadline
The move comes as the Indian government is selling its national airline. Minister of State for Civil Aviation Hardeep Singh Puri said the divestment was decided because additional financial support to revive ailing Air India would not be the best use of scarce government resources.
The government has repeatedly extended the time limit for potential buyers to make their offers. The most recent October 30 deadline has been extended to 5:00 p.m. on December 14. Bidders will be notified of the government’s decision by 5:00 p.m. on December 28.
Previously, the government required whoever bought Air India, of which 100% of the capital is offered, to absorb ₹23,000 crore ($ 3 billion) in carrier debt. Along with the extension of the deadline for submissions, the Ministry of Civil Aviation changed its tone to say that bidders could choose how much debt they were willing to absorb.
Domestic air traffic on the rise
Meanwhile, any potential buyer can rejoice that India’s domestic aviation is slowly but surely make a bounce after the total lockdown of the country in March.
Domestic civil aviation operations continue on a steady growth path.
✈️ 2,05,624 passengers
✈️ 1789 flights
✈️ Total flight movements 3579
✈️ Not at airports 4,08,526
(November 12, 2020) pic.twitter.com/NQJREJjuiS
– Hardeep Singh Puri (@HardeepSPuri) November 13, 2020
Do you think we’ll see a new Air India owner before the new year? What do you think of the short-term loan taken out by the carrier for these planes? Let us know what you think of the situation in the comments section.