SBI, Bank of Baroda provide Rs 14000 crore loan to Air India

31 Mar 2023 , 11:09 AM

The top airline group owned by Tata conglomerate, Air India has secured funds worth Rs 14,000 crore from State Bank of India and Bank of Baroda. This fund raise includes a mix of fresh loans and refinance of existing debt, as per various news reports.

It is said that Rs 1,500 crore has been obtained through the Emergency Credit Line Guarantee Scheme (ECLGS), and Rs 12,500 crore through the refinancing of existing loans.

The amount will be used to fund the payout for the voluntary retirement scheme (VRA), which is likely to cost over Rs 200 crore. The new round has been offered to all permanent general cadre officers who are at least 40 years and have completed at least five years of continuous service at Air India.

For the FY22, the company had a total debt of Rs 15,317 crore down from Rs 45,037 crore in FY21, according to disclosures in its consolidated financial statements for FY22.

Air India has placed an order for 470 aircraft with Boeing and Airbus as part of the expansion plan. 

The report said, the loans from SBI and BoB are benchmarked to State Bank of India’s six-month marginal cost of funds-based lending rate (MCLR) and are priced 50 basis points (bps) above it.