Since the Rs 29,464-crore Air India working-capital debt taken over by it is backed by a sovereign guarantee, the Centre’s special purpose vehicle Air India Assets Holding (AIAHL) is set to ask banks to cut interest rate on bulk of the loan to about 8.5% from 10.5-11% now.
The shifting of this debt to AIAHAL from the carrier was one of the steps taken to make the airline attractive to potential buyers.
“The AIAHL will negotiate for restructuring and refinancing of the costly debt,” an official said on the condition of anonymity.
The move could help reduce the interest burden on AIAHL by about Rs 300-400 crore per annum, as some Rs 15,000 crore of high-cost debt could be recast. However, it is not obligatory on banks to cut the interest rate.
