Air India Assets Holdings Ltd (AIAHL) is expected to come out with its second bond offering worth Rs 15,000 crore in the next 10 to 12 days, according to a senior official.
AIAHL — the special purpose vehicle of Air India — mopped up Rs 7,000 crore through bonds on Monday and the issue was oversubscribed nearly 20 times.
A total of Rs 22,000 crore is to be raised by sale of bonds by AIAHL and the proceeds would be used to repay the national carrier's debt, which is estimated to be over Rs 58,000 crore.
The official said AIAHL would issue bonds, guaranteed by the government, to the tune of Rs 15,000 crore in September. The bonds, having a ten-year tenure, are expected to be issued in the next 10-12 days. State-owned LIC and EPFO are likely to be among the bidders, the official added.
On Monday, Air India said AIAHL's bond issue with a three-year tenure of Rs 1,000 crore with a green-shoe option of Rs 6,000 crore was fully subscribed at 6.99%. "The company received bids worth Rs 20,830 crore, which is the highest in the yield-based bond market in the history of BSE. The company has decided to accept the entire issue of Rs 7,000 crore," the airline had said.
When AIAHL was set up last year, the plan was to transfer Rs 29,464 crore of Air India's debt to the special purpose vehicle. Now, AIAHL is raising Rs 22,000 crore through issuance of bonds. The remaining amount of little over Rs 7,400 crore, in the form of NCDs and in the name of Air India, would be novated to AIAHL. AIAHL has been created for warehousing accumulated working capital loan not backed by any asset along with four subsidiaries, non-core assets, painting and artifacts and other non-operational assets of the airline, an official said in February.
The four subsidiaries are Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL), Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI).
The government is expected to soon come out with a road map for disinvestment of Air India.