To lease out 15 floors of its 23-storey building to
earn income of.36 cr annually
MANISHA SINGHAL & KAILASH BABBAR MUMBAI
In The Predators Ball,the 1980s bestseller,author Connie Bruck describes a scene involving junk bond raider Mike Milken and a CEO of a company,a large chunk of whose bonds are owned by Milken.When the unwary executive challenges Milken by claiming to own a substantial portion of the companys equity,Milken retorts that he has life and death powers over the company as the biggest owner of its debt.The Indian lenders to Air India are not yet in a position to make such threats to the nearly-bankrupt,stateowned airline.They may also not need to as the airline enjoys sovereign guarantee on its debt.But in a move with interesting implications for the future of their relationship,the lenders and Air India are coming together to strike a deal over one of the priciest pieces of real estate in Mumbai,the Air India building at Nariman Point.The stricken airline has begun talks with some lenders to lease large portions of its iconic headquarters tower to secure some much-needed rental income at a time when flying has become difficult due to the pilots strike.Air India thinks it can earn income of about Rs 36 crore annually by leasing 15 floors of this 23-storey seafacing building.It is most likely that lenders who recently recast the debt might end up with a lions share in occupying the skyscraper,as sources say that some of the public sector entities that the airline is in talks with are Life Insurance Corporation of India and SBI Capital Markets.Other PSU banks participating in the consortium of lenders are also in discussions with the airline.SBI Capital Markets is in discussion to take up four floors,LIC two floors,while another PSU bank,who is also a lender to Air India,is in talks to lease three floors in the building.
MANISHA SINGHAL & KAILASH BABBAR MUMBAI
In The Predators Ball,the 1980s bestseller,author Connie Bruck describes a scene involving junk bond raider Mike Milken and a CEO of a company,a large chunk of whose bonds are owned by Milken.When the unwary executive challenges Milken by claiming to own a substantial portion of the companys equity,Milken retorts that he has life and death powers over the company as the biggest owner of its debt.The Indian lenders to Air India are not yet in a position to make such threats to the nearly-bankrupt,stateowned airline.They may also not need to as the airline enjoys sovereign guarantee on its debt.But in a move with interesting implications for the future of their relationship,the lenders and Air India are coming together to strike a deal over one of the priciest pieces of real estate in Mumbai,the Air India building at Nariman Point.The stricken airline has begun talks with some lenders to lease large portions of its iconic headquarters tower to secure some much-needed rental income at a time when flying has become difficult due to the pilots strike.Air India thinks it can earn income of about Rs 36 crore annually by leasing 15 floors of this 23-storey seafacing building.It is most likely that lenders who recently recast the debt might end up with a lions share in occupying the skyscraper,as sources say that some of the public sector entities that the airline is in talks with are Life Insurance Corporation of India and SBI Capital Markets.Other PSU banks participating in the consortium of lenders are also in discussions with the airline.SBI Capital Markets is in discussion to take up four floors,LIC two floors,while another PSU bank,who is also a lender to Air India,is in talks to lease three floors in the building.
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