Air India handover: SBI-led consortium keen to provide loans to Tatas
The Tatas can expect bank loans to patch up Air India. A consortium of banks that include State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB) and the Union Bank of India are keen to provide loans to the Tata group.
A PTI report on Thursday said they have agreed to provide both term loans and working capital loans. The Tatas have offered Rs 18,000 crore for Air India, including Rs 15,300 crore for Air India’s existing debt and Rs 2,700 crore to be paid as cash to the Centre.
Earlier reports indicated the group is seeking a loan of Rs 23,000 crore that includes re-financing the existing debt and operational purposes. Shares of these banks gained at the stock exchanges on Thursday on the news of them providing loans to the Tatas.
“They will also have an exposure to the strong Tata group which will reflect well in their asset quality,’’ market circles said.
Shares of BoB for instance rose over five per cent to end at Rs 103.50, while the SBI scrip gained almost three per cent to settle at Rs 520. The PNB counter also finished in the green — up by 4.31 per cent at Rs 41.10, while Union Bank of India shares spiked around 9 per cent to Rs 46.45.
As of August 31, Air India had a total debt of Rs 61,562 crore. Around 75 per cent of this debt or Rs 46,262 crore was transferred to a special purpose vehicle AIAHL before being handed over to the Tata group.