Tata Group acquired Air India and has secured loans worth Rs 14,000 crore from SBI and Bank of Baroda by a mix of fresh loans and refinancing existing loans as reported by the Mint. The airline raised Rs 1,500 crore through the Emergency Credit Line Guarantee Scheme and the remaining Rs 12,500 crore by refinancing its existing loans.
The new funds will be deployed towards the air carrier's ambitious expansion plans in the global and domestic markets. Air India recently placed an order for 470 aircraft with Airbus and Boeing. The Mint report also added that an estimate of Rs 200 crore will be used for paying out Voluntary Retirement Scheme (VRA) which is offered to all general cadre officers who are aged 40 and above and have served the airline for 5 continuous years.
The loans will be charged at 50 basis points above the benchmark of SBIs' six-month marginal cost of funds-based lending rate (MCLR). The current MCLR of SBI is at 8.4%. "Bankers are more than willing to lend to the Tata Group,” a person quoted in the report. The Tata Group acquired the state-owned airlines in January last year for a cash payment of Rs 2,700 crore and took over debt of Rs 15,300 crore.
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