Indian airline Air India averted default and obtained short-term funds to serve Rs 700 non-convertible debentures due to be redeemed on Thursday, agency sources said. press release.
The operations and revenue flows of the heavily indebted national carrier were affected by an epidemic of coronavirus, which also resulted in the suspension of domestic and international flights.
On March 23, India Ratings warned that Air India may default on its debt due to poor cash flow following the announcement of the nationwide foreclosure with national airspace, until to April 14. As a result, the agency had placed the instrument under surveillance the same evening with a negative outlook.
An airline source told PTI on Thursday that it had obtained the necessary amount from banks with the government guarantee to pay interest to investors. However, how much money was raised or the amount needed to pay was not disclosed.
A response to a letter sent to an Air India spokesperson for confirmation is awaited.
According to the source, Air India obtained short-term bank loans backed by a government guarantee to refinance the entire principal amount of Rs 700 crore from MNT. These debentures must be paid or reimbursed on March 26.
The airline needs Rs 30 crore to pay the interest.
The issuer’s account was not provided in the same way as of March 25, according to the IndiRa report. The amount was under negative watch since March 23, which reflects the delays in funding the designated account as of March 23, as confirmed by the trustee IDBI Trusteeship Services.