Govt hopes things will move in right direction for AI

With the Reserve Bank of India approving a financial restructuring plan for cash-strapped Air India, Government today hoped that things will move in a positive direction for the national carrier.

"I think things would move in a positive direction," Civil Aviation Minister Vayalar Ravi said replying to a question on RBI clearing the proposal.

Yesterday, the RBI cleared the debt restructuring plan for the loss making carrier under which the bank approved extension of the loan tenures to 15 years from 10 years.

The decision, which would considerably ease the debt servicing burden of the troubled airline, was taken at a meeting that was attended by officials of the RBI, Air India and SBI Caps which has submitted the debt restructuring proposal.

"Our officers have discussed the issue with them (RBI officials) and explained the situation. They (RBI) made some suggestions," Ravi said refusing to elaborate further.

Under the Rs 18,000 crore Corporate Debt Restructuring (CDR) proposal, the lenders would extend the tenure of Rs 11,000 crore short-term loans into long term loans of 15 years and convert Rs 7,000 crore debt into equity.

The national carrier has accumulated debt of over Rs 64,000 crore from 14 lenders which, under the aegis of SBI Caps, had submitted a restructuring proposal to RBI seeking its permission to extend the loan tenures, among other issues.

Out of this, over Rs 22,000 crore are accumulated losses while Rs 40,000 crore amounted to the loans taken for aircraft acquisition.