The long-awaited Rs 18,000 crore financial restructuring plan for cash-strapped Air India has finally been approved by a consortium of 19 banks led by State Bank of India, an official said on Tuesday.
The plan includes a debt restructuring of Rs 18,000 crore by the banks and a committed equity infusion by the government, the official said in a statement here.
The high-cost working capital debt of the national carrier stands at Rs 22,000 crore, of which the banks will restructure Rs 18,000 crore.
From this (Rs 18,000 crore), Rs 10,500 crore will be converted into long-term debt with a repayment period of 10-15 years.
The remaining Rs 7,400 croe will be repaid to banks through a government-guaranteed bond issue.
The proposed restructuring - which will now go for cabinet approval - will help AI reduce its interest outlay substantially.
As part of the airline's restructuring plans, the government had announced an infusion of Rs 4,000 crore during the current fiscal, raising the airlines' equity base to Rs 7,345 crore, in the union budget for 2012-13.