Air India to raise short-term loans of Rs 6,150 crore by month end

With finances stretched, the govt is not in a position to infuse cash into the airline, but will help the carrier to raise money through sovereign guarantee

Financially-stressed carrier Air India has sought government-guaranteed loans of Rs 6,150 crore through short-term loan (STL) from domestic lenders by the end of this month.

The money will be used to refinance loans taken to purchase seven Boeing 787 aircraft. According to the tender document, the company has asked banks to submit their bids by November 20, indicating the principal amount they are willing to offer. The bank with the lowest all-inclusive interest rate” will be shortlisted first.

The rate of interest will be linked to MCLR (marginal cost of fund-based lending rate) instead of base rate with reasonable spread