Bankers to firm up debt recast for AI, aviation industry

Bankers will meet later in the week to work out a debt restructuring plan for Air India and the ailing civil aviation industry, State Bank of India (SBI) Chairman Pratip Chaudhuri said here today.

"We have agreed to work out a restructuring plan for both Air India and the civil aviation industry together. Within this week itself, all the banks are meeting at the highest level along with SBI Caps, who are advisor to Air India," he told reporters after a meeting with Finance Minister Pranab Mukherjee.

The bankers, he said, would also be talking to the Air India management and look at various options for debt restructuring of the national carrier.

The flagship air-carrier is sitting on a mountain of debt running into Rs 69,000 crore, out of which Rs 42,000 crore was for fleet acquisition and the rest was working capital loans taken from 14 lenders led by SBI.

Under the financial restructuring plan, Rs 11,000 crore out of the working capital loans of around Rs 27,000 crore would be converted into long-term debt and Rs 7,000 crore would be converted into cumulative redeemable preferential shares.