Govt looks to rejig Air India debt to sweeten deal for buyer

PMO is learnt to have suggested that Air India should be owned and run by domestic investors only

Air India will rejig its debt before going under the hammer to make itself lucrative to a potential buyer.

This is the second attempt to restructure the government-owned airline’s debts. Officials said state-owned banks would soon start a fresh round of discussions with Air India on reducing its debt burden.

Of Air India’s Rs 46,570-crore debt, around Rs 16,000 crore is on account of aircraft loans, which were raised partially from EXIM Bank, foreign institutions and through non-convertible debentures. These loans are guaranteed by the government.

Sources said the aim was to restructure working capital loans in return for assets and land. Air