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AI SPV raises ₹7,000 cr. for refinancing debt

Last month, too, the special purpose vehicle raised the same amount.

Last month, too, the special purpose vehicle raised the same amount.   | Photo Credit: Regis Duvignau

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Bond issue fully subscribed at 7.39%

Air India Assets Holding Limited (AIAHL), a special purpose vehicle created to partially relieve Air India (AI) of its debt liabilities, on Thursday raised ₹7,000 crore to refinance its debt at a lower interest rate in what is the second tranche in two months.

Last month, too, the special purpose vehicle raised the same amount.

With Thursday’s bidding process for its bond issue, AIAHL has been able to find takers for nearly half of the total debt of ₹29,464 crore transferred to it from AI’s books.

“The second bond issue of Air India Assets Holdings Limited with a 10-year tenure of ₹1,000 crore with a green shoe option of ₹6,000 crore has been fully subscribed at 7.39%. The company received bids worth ₹21,736 crore.

“The company has decided to accept the entire issue of ₹7,000 crore,” Air India said in a statement.

The interest rate of 7.39% is lower than the interest rate that the carrier has been paying on its loans by 110 to 160 basis points, according to senior airline officials.

Air India Assets Holding was set up by the government in February after a Cabinet decision and nearly half of the total ₹58,000 crore of debt of the airline was transferred to the special purpose vehicle.

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Printable version | Nov 22, 2019 7:48:37 AM | https://www.thehindu.com/business/ai-spv-raises-7000-cr-for-refinancing-debt/article29649800.ece

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