Air India to prepay debentures at a premium on investors’ insistence
The investors of Air India’s debentures have asked the airline to prepay the bonds at a premium instead of the airline agreeing to prepay the bonds on par in November last year. Prepaying the bonds at a premium would entail additional cost to the Indian government which was prepaying Air India’s debt as part of the airline’s privatisation plan.
In November last year, the airline had announced that it would prepay non-convertible debentures worth Rs 12,900 crore (Two series of Rs 7,400 crore and Rs 5,500 crore) from investors. The investors however sought additional prepayment charges as they would lose interest on the debentures for the rest of the term. The NCD holders have asked for an additional two per cent as premium on the debentures.
