Air India has extended the date of issue of non-convertible debentures (NCD) by a week on account of delay in approving the sovereign guarantee for bonds from the finance ministry. The earlier date for the close of bond issue was September 7.
The extension by a week is due to the delay in approving the sovereign guarantee for the bonds from the finance ministry. We expect the approvals to come in 2-3 days and close the issue by the end of next week, said a senior Air India official,who did not want to be identified.
The official added that the delay in approvals is also on account of the change of guard at the finance ministry. Also,the new expenditure secretary has not been keeping well for the last one week and that is one of the reason for the delay, the official added.
The new expenditure secretary RS Gujral was earlier the revenue secretary,and the earlier expenditure secretary Sumit Bose was made the revenue secretary in a recent reshuffle at the finance ministry.
According to the financial restructuring plan approved by the Cabinet,the national carrier had to close its NCD issue by September 30,2012.
The moment approvals come from the finance ministry,we will kick off the process. The final phase of allocation does not take much time and we should easily be able to close it before the end of this month, the official said.
As part of the financial restructuring,Rs 18,000 crore of Air Indias short-term debt is to be restructured.
Of the total amount,around Rs 10,600 crore has been converted to long-term debt with a repayment period of 15 years at a lower interest rate and repayment of Rs 7,400 crore to banks through a bond issue.