Air India is raising Rs 6,150 crore in short-term loans to refinance foreign currency bridge loans taken to buy seven Boeing 787 and 777 aircraft. Air India is looking to repay its aircraft debt towards six Boeing 787 Dreamliners and one Boeing 777, Aviators Buzz reported.
Air India has floated a bid document for the same which says that the proceeds of the loan, which would carry a sovereign guarantee, would be utilised to refinance foreign currency bridge loans taken to buy seven Boeing 787 and 777 planes. It is also offering aircraft such as Boeing 787 and 777 as collateral for the loan, which will be repaid in a year, the report said.
Air India will raise the total amount in seven tranches, which would consist of three tranches of Rs 790 crore each, three tranches of Rs 925 crore each, and one tranche of Rs 1,005 crore, according to the tender document.
According to an Indian Express report, the government will guarantee these loans.
The interest rate payable by the national carrier will be linked to "MCLR/GSEC rates with reasonable spread as margin". The marginal cost of funds-based lending rate or MCLR is a tenor-linked internal benchmark. It is determined by the bank depending on the period left for the repayment of a loan. Typically, banks cannot lend at a rate lower than the MCLR of a particular maturity for all loans linked to that benchmark.
This also comes days after the Union Government revised bids for the sale of the nationalised airline. Last week, Civil Aviation Minister Hardeep Singh Puri said that bidding for Air India would be done on the basis of its enterprise value instead of equity value and extended the deadline for submitting to December 14 from October 30.
Enterprise value of a company includes the equity value, debt as well as cash with the company. Equity value measures the value of a company's shares.
"We have decided to ask for bids for Air India on enterprise value," the minister said at a press conference last Thursday.