Following the government's direction and in the move of reforming the worsening financial condition of public sector aviation company Air India, a consortium of 19 banks, led by State Bank of India, has approved the financial restructuring plan of Rs. 18,000-crore, which would need Cabinet Approval.
Air India has a total 22,000-crore short-term debt at present that has higher interest rate. The move of banks would ease the mounting burden of loans from Air India that has to bear Rs.15-crore loss daily.
In the approved restructuring plan, banks have decided the repayment strategy in two ways - Rs. 10,500-crore would be converted into long term debt with repayment term of 10-15 years and secondly, the remaining (Rs.7,500-crore) amount would be repaid through a government-guaranteed bond issue to banks.
The repayment period for restructured loans begins from one year and six months respectively.
This restructuring plan needs the approval of the cabinet which is likely give nod by April 15, sources said.
--With Agencies Input--
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