Air India seeks $1bn loan

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Air India plans to borrow up to $1 billion from Indian and overseas lenders, after receiving approval for more than Rs300 billion ($5.8 billion) from the Indian government during the next eight years.

The state-owned carrier approached financiers with a tender requesting up to $1 billion with a 12-months' maturity.

The loan, which will be used for working capital purposes, can be fixed or floating, according to the terms of the tender. Bids have to be sent by 4 May.

Last week the Indian government approved a restructuring plan for Air India as it seeks to turn the loss-making carrier profitable by 2018.

Under the terms of the bailout plan, the Indian government will provide a Rs67.5 billion upfront cash injection, as well as Rs45.5 billion in equity for deficit support until financial year 2021. The government will also provide Rs189 billion in aircraft loans and Rs74 billion in debt repayments to financial institutions and banks.

Indian banks have also approved Air India's conversion of short-term working capital loans of Rs110 billion into long-term loans.