A consortium of banks is willing to participate in financial restructuring plan of the national carrier Air India after ICICI Bank’s move to refinance long term debt, said Praful Patel, minister for heavy industries and public enterprises.

According to Mr. Patel, there is no necessity to bring the national airliner under Board for Restructuring of Public Sector Enterprise at this stage as various revival packages are being worked out to bail it out.

“Despite difficulties the company (Air India) never defaulted. The banks are happy to refinance. If ICICI Bank can take 15 years average maturity call for Air India, I am sure that existing lenders will also take a look at Rs. 18,000 crore debt restructuring plan,” Mr. Patel, former Civil Aviation Minister, said.

Air India is reeling under debt of Rs. 40,000 crore, out of which Rs. 18,000 crore is its short term capital loan while foreign loans stood at Rs. 24,000 crore.

Last month, the Air India board cleared the debt restructuring plan for the airline. The plan was prepared by SBI Capital Market Ltd (SBICAPS) and vetted by financial advisory firm Deloitte following directions of the Reserve Bank of India.

Currently, there is a mismatch between current cash outflow in terms of interest payments and inflow. There is proposal to convert some of the debt into a long term loan.

That may give a cushion of three to five years, Mr. Patel said.

About 20-25 per cent of the total turnaround plan of Air India has been completed since it was drawn in 2009, Arvind Jadhav, chairman and managing director of Air India, had said in an interview recently.

Air India in January mandated ICICI Bank to refinance loans so as to purchase 21 Airbus A 320 aircraft worth Rs. 5500 crore.

“The interest rate worked out to be below 10 per cent with an average bullet repayment of 15.2 years maturity,” Mr. Patel said.

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