Air India may soon get $300 million loan through ECB

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Air India might soon get the USD 300 million loan through external commercial borrowing (overseas loans) to meet its working capital requirements.

Air India had on April 9 floated an international tender for raising up to USD 300 million through ECB window.

This ECB would be guaranteed by the Government of India and interest rate is fixed or floating linked to Libor (London inter-bank offered rate), according to the offer for invitation document.

Reserve Bank of India had for the first time in April 2012 allowed the civil aviation sector to raise funds via the ECB route for a period of one year.

The ceiling for the entire civil aviation sector to raise funds through ECB route currently stands at USD one billion, and the maximum permissible ECB limit for an individual airline is USD 300 million.

The funds raised through this route can be utilised for working capital as well as refinancing the outstanding working capital Rupee loan availed of from the domestic banks.