The Tata Group is in talks with banks to acquire working capital loans of around Rs 15,000 crore for Air India, the airline it bought from the government last year and is making a valiant push to revive. , reported The economic period.
According to a person familiar with the matter, the funds will be used to cover day-to-day flight operations and losses, restore the fleet, pay for aircraft rentals and overhaul computer systems.
According to another source, the loan will have a term of three years with an annual reset of between 7.5 and 8%.
Last year, State Bank of India (SBI), HDFC Bank and Bank of Baroda extended an unrated and unsecured loan of Rs 23,000 crore to Talace, a Tata Sons company that won the bid of Air India, at a rate of 4.25%. . At the end of January, the loan must be renewed.
According to a bank official, rising interest rates and lack of liquidity in the system will increase borrowing costs. The Reserve Bank of India’s website lists 6.91% as the threshold for 364-day Treasury bills.
Tata Sons, through Talace, won Air India’s bid for Rs 18,000 crore in October last year. Some 69 years after the government nationalized the airline in August 1953, it took ownership of the carrier in January this year.
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