New Delhi: Air India, the loss-making national carrier, plans to sell Rs7.95 billion (Dh642 million) of bonds as it seeks to combat rising competition and turn around unprofitable routes.
Mumbai-based Air India will sell the bonds to pay for new planes, Chairman and Managing Director Arvind Jadhav said in a telephone interview on Monday, without being more specific.
Parent company National Aviation Co. of India Ltd. hired Standard Chartered Plc to help it sell Rs7 billion of 10-year bonds this month and to help its low-cost Air India Express unit issue Rs950 million of similar-maturity notes, according to two people familiar with the matter, who asked not to be named because the terms are private.
Air India may report a Rs54 billion loss for the fiscal year ending this month compared to a loss of Rs55.5 billion a year earlier, Civil Aviation Minister Praful Patel told lawmakers on March 9.
The government approved an Rs8 billion cash injection last month after Air India delayed salary payments for its 31,000 workers in June because of a cash crunch.
Jadhav said in August that Air India will create four business units, slash capacity and pay debt to turn profitable in three years.
The company's debt more than doubled to Rs152.41 billion as of June after ordering 111 planes from Airbus and Boeing Co., according to Patel.
National Aviation's bonds will have the top AAA rating from CRISIL Ltd. due to its government support, according to a statement posted on the risk assessor's Web site.
Neither National Aviation nor Air India have public bonds outstanding, according to data compiled by Bloomberg.
