Tata Group can raise up to Rs 15,000 crore through syndicated loan for the acquisition of Air India.
Tata and Air India: Tata Group can raise up to Rs 15,000 crore through syndicated loan for the acquisition of Air India. According to the Economic Times report, the maturity of the loan will be three years and the interest rate will be 7 percent. State Bank of India (SBI) can be the lead banker in this proposed syndicate. Because he had already issued the necessary bank guarantee for bidding.
Ongoing discussion with some foreign banks
The report said that the group is also in talks with some foreign banks and select local banks. Foreign banks include Standard Chartered, Citi, Deutsche, JP Morgan and Barclays. A person with knowledge of the matter has given this information to ET. However, banks and SBI have not yet given their response in this matter.
According to the report, a Tata Sons spokesperson said in the matter that he has been declared the winner of the bid for Air India. They will work with the Indian government to complete the process over the next few months. He said that he will be able to give any further feedback in this matter only.
The group working in the automobile to aviation sector was declared the winner of the bid for the airline on Friday. This whole process has taken four years and two attempts. The letter of intent is expected to be given to Tata Sons on Monday. The discussion on the proposed loan is still going on and no conclusion has been reached in this matter yet. The option of bonds also cannot be ruled out right now. Foreign fundraising can also be seen in this case.
A person involved in the matter told ET that there are limits for local banks to fund an acquisition. However, public sector banks are exempt. He said that the relationship between SBI and Tata can go on for a long time. He further said that some foreign lenders have also approached the group for any requirement to raise funds. Some foreign banks have also sent term sheets to Tata Sons. Lenders will also discuss again this week.
Advisory team forming for Tata Sons acquisition
Apart from this, Tata Sons is forming an advisory team for a short period before the acquisition of Air India. It will have chief executives from Tata Sons, including board members, global aviation experts and some top Air India executives. According to an ET report, the board of Tata Sons will meet on Tuesday to discuss the strategy for Air India. Funding plans for the group, which includes Air India, are also likely to be discussed.
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