Reportedly, the funds will support the airline’s upcoming expansion into both domestic and international markets with leased aircraft and new planes.
Tata group-owned Air India has secured funds worth Rs 14,000 crore from State Bank of India and Bank of Baroda through a mix of fresh loans and refinance of existing debt, media reports suggested.
The fundraising comprised Rs 12,500 crore to refinance loans and Rs 1,500 crore obtained through the pandemic-era Emergency Credit Line Guarantee Scheme (ECLGS), Moneycontrol reported quoting a Livemint report.
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Reportedly, the funds will support the airline’s upcoming expansion into both domestic and international markets with leased aircraft and new planes.
The report said a part of the borrowing was also likely to be used to fund the payout for the voluntary retirement scheme (VRA), which is likely to cost over Rs 200 crore.
The new round has been offered to all permanent general cadre officers who are at least 40 years and have completed at least five years of continuous service at Air India.
Air India has placed a firm order for 470 aircraft with Boeing and Airbus as part of the expansion plan.
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The airline had a total debt of Rs 15,317 crore in FY22, down from Rs 45,037 crore in FY21, according to disclosures in its consolidated financial statements for FY22.
In January 2022, the Tata group took control of Air India, Air India Express and ground handling service provider AI SATS from the government after paying Rs 2,700 crore in cash and taking over Rs 15,300 crore of debt of the national carrier.
The loans from SBI and BoB are benchmarked to State Bank of India’s six-month marginal cost of funds-based lending rate (MCLR) and are priced 50 basis points (bps) above it, the report said.
