Life insurance major LIC and the Employee Provident Fund Organisation (EPFO) have agreed to fully subscribe to the R7,400-crore bond sale of national carrier Air India, a top SBI Caps official said here on Wednesday.
“Life Insurance Corporation and the EPFO have agreed to purchase the entire Rs 7,400-crore non-convertible debentures (NCDs) being sold by Air India. However, the bond sale programme will continue to remain open till December 18," a senior official of SBI Caps, which is the sole arranger to the issue, on condition of anonymity.
The 19-year-old issue has a coupon of 9.08% and will fetch 9.27% for LIC and the EPFO on maturity, he added.According to an Air India official, LIC has subscribed to bonds worth R3,000 crore and the remaining by EPFO.
When contacted, Air India finance director S Venkat refused to talk, saying only the spokesperson could comment. Calls to the Air India spokesperson did not elicit any response. The NCD issue is part of the revival plan of the debt-laden national carrier, which was given a Rs 30,000-crore bailout by the government in April. Accordingly, Air India will have to use the NCD proceeds to retire a good part of short-term working capital loans taken from 19 banks.