Air India Assets Holding Ltd (AIAHL) — a special purpose vehicle (SPV) of Air India — on Monday successfully raised Rs 7000 crore by issuing bonds on private placement basis through the BSE Bond platform. The issue, which is the highest ever bids received for yield based-bidding, received Rs 20,830 crore worth of bids.
AIAHL is planning to raise funds by issuing bonds with different tenures as part of efforts to clean up the balance sheet of Air India, which has a debt burden of more than Rs 58,000 crore.
These bonds would have a tenure of three years and three months. Banks and mutual funds mopped up the bonds in the first tranche of the bond offering. The proceeds from the bond offering would be used to repay Air India’s debt. While it’s for the first time that AIAHL is issuing bonds, Air India has issued bonds on earlier occasions and the last such issue was worth around Rs 7,400 crore done in 2012. When AIAHL was set up last year, the plan was to transfer Rs 29,464 crore of Air India’s debt to the SPV.
Ashwani Lohani, Chairman, Air India Assets Holding and CMD, Air India, said: “very happy at the overwhelming response to the bond issue fully backed by government of India. It is also very heartening to note that the entire issue was subscribed at a very attractive rate by 6.99 per cent. This reflects the confidence of the entire market in securities fully backed by government of India.”
The positive response received from all categories of Investors will act as a stimulus to the disinvestment process of Air India Limited,” he said. Vinod Hejmadi, Director, Air India Assets holding Director Finance, Air India Limited said: “the issue was oversubscribed by 20.83 times despite the volatile market conditions on Monday. It was the record largest mobilization of funds for yield based bidding in the history of BSE’s Electronic Bidding Platform.”
The issue was executed smoothly, efficiently and in a transparent manner on the BSE Electronic Bidding Platform,” he said. As the debt-laden national carrier is set for disinvestment, NCDs worth little over Rs 7,400 crore in the name of Air India is likely to be novated to AIAHL.