Hit by Covid slump, Mumbai airport seeks moratorium till March 2022

Mumbai International Airport (MIAL), which has been hit by a slump owing to the pandemic, has sought extension in the payment holiday on loans till the end of March 2022, as part of the debt restructuring package.
 

Besides seeking a reduction in interest rate for all facilities (loans), the entity wants an additional term loan for the period ending March 2021.
 

The company has submitted to its lenders a proposal for restructuring existing loans and working capital facilities, delineating the change in the ownership clause under the Reserve Bank of India’s circular dated June 7, 2019. MIAL has also applied for restructuring its real estate deposit loan.
 

India Ratings (Ind-Ra) said in a statement that it has revised the rating watch status of MIAL’s bank facility to Rating Watch Evolving (RWE) from Rating Watch Negative (RWN). The company approached its lenders on September 29, with a recast proposal ahead of its debt-servicing due date of September 30.
 

MIAL has not paid its debt obligations due in September and October, given that the restructuring plan was submitted prior to the due dates.
 

It has also sought an extension in tenure and a revised repayment schedule, consequent to the funded interest term loan and moratorium extensions.
 

GVK Group, the existing promoter of MIAL, has agreed to cooperate with Adani Group regarding the takeover of debt availed of by the former.
 

Subsequently, Adani Group will take over the ownership of MIAL, upon receipt of approvals. The change in ownership, along with the approval of the restructuring plan, will have a positive impact on MIAL’s ratings, said Ind-Ra.
 

The rating agency added that it would analyse the restructuring plan and its impact before taking any further action.
 

MIAL’s financial profile was severely impaired by the outbreak, the resultant lockdown, and continued restrictions on airlines’ operations. The total number of passengers handled by the airport plummeted 91.9 per cent (year-on-year) to 1.86 million in H1FY21.
 

Ind-Ra has not recognised non-payment of debt obligations for September and October as default, because of the invocation of restructuring ahead of the due dates, as well as the adverse impact of the pandemic on the sector.
 

Ind-Ra continues to factor in the support provided by MIAL to Navi Mumbai International Airport (NMIAL) to arrive at the ratings. MIAL has undertaken support to NMIAL’s equity requirements and cost overruns.
 

At the same time, it has agreed to provide corporate guarantee for the replenishment of debt service reserve account, for four years from the commencement of operations.