A consortium of lenders has agreed to a new financial restructuring plan for troubled state-run Air India, according to airline sources. The group of lenders will ask for a "minor clarification" from the Reserve Bank of India (RBI) on the restructuring plan. The lenders held meeting with the officials form the carrier in New Delhi.
RBI has requested approval of extension of the tenure of loans to Air India by five years. The loans are due for payment for repayment after 15 years. The lenders led by the State Bank of India will seek the minor ratification from the RBI.
The banks are now in the process of giving final approval for the financial plan. Air India was holding discussions with the banks to restructure its working capital debt of about USD 4 billion. The airline is trying to implement with a focus on a turnaround plan with a hub-and-spoke route model. The airline is planning to save costs by redeploying staff and unload non-core real estate.
The civil aviation ministry will prepare a cabinet note for the restructuring plan by the airline. Air India has posted a net loss before tax of Rs 7,000 crore for the year ended March.