India’s national carrier, soon awaiting its privatisation, gets a new chairman and managing director. A 1993-batch IAS officer of Arunachal Pradesh, Goa, Mizoram and Union Territory cadre Vikram Dev Dutt took charge as the Chairman and Managing Director (CMD) of Air India. His appointment is in effect from Friday.
The Secretary in the Ministry of Civil Aviation, Rajiv Bansal, was at the helm of Air India so far. While replacing Bansal as CMD, Dutt will have the same pay scale as an Additional Secretary.
Immediately prior to this appointment, Dutta served as the Principal Secretary of the Services Department, the tenure of which was over in March 2021. In June 2020, he was the Principal Secretary for the Health and Family Welfare Department of the Delhi Government, a media release from Air India said.
Air India to prepay debentures at a premium to investors
Meanwhile, the road to privatisation is becoming rocky for Air India. The investors have requested the national carrier to prepay the bonds at a premium instead of the earlier agreement. In November 2021, Air India had agreed to prepay non-convertible debentures (NCD) worth Rs 12,900 crore (in two payments of Rs 7,400 crore and Rs 5,500 crore) from investors. Since the investors will lose interest in the debentures for the remaining term, they have sought prepayment charges at 2% as a premium on the debentures.
The Tata Group had offered to pay Rs 18,000 crore to the Indian government to take over the airline in October 2021. Under the takeover, Tata group will bear Air India debt worth Rs 15,300 crore, and the rest was to be paid to the Indian government as cash for the airline’s equity. Before the actual handover, the government will prepay part of Air India’s loans so that the new owner acquires the airline with a clean slate.
Tata Group, on the other end, was also trying to raise funds to replace the loan it would take over in Air India. According to reports, Air India was planning to raise Rs 23,000 crore to fund the acquisition at an interest rate of 4-5%.