Air India has approached the government asking it to guarantee non-convertible debentures (NCD) worth `10,500 crore that it wants to issue against long-terms debt on its books. Converting loans into NCDs would bring down the interest rate by about 2%, senior executives at the airline explained. The country’s national carrier also plans to use the proceeds from a sale and lease back of wide-bodied aircraft to retire Rs ,500 crore or about a fifth of its short-term debt.
As a consequence of some of these measures, the airline is expected to turn cash positive by 2017-18 rather than by 2019-20 as was envisaged earlier. Moreover, it is expected to report net profits by 2019 -20 ahead of the time frame of 2021-22 built into the original TurnAround Plan (TAP). A new TAP says Air India will induct 100 aircraft by including narrow-bodied planes from Airbus, Boeing 787, 777 and ATR aircraft by FY 20-21 indicating towards a significant increase in capacity in the next four years.
Going by the current performance the airline is expected to repay all the aircraft related loans by 2021.
At the end of March 2016, Air India’s total borrowings stood at Rs 50,000 crore of which Rs 30,000 crore are working capital loans. The remaining Rs 20,000 crore was borrowed to buy aircraft.
The sale and lease back arrangements for nine Boeing 787 aircraft are expected to fetch the airline an estimated 900 million dollars, senior executives told FE. The executives added the repayment of short -term loans and some bridge bridge loans should happen in the current year. Jung-ho Kang Womens Jersey