Aviation

Difficult to avail loan restructuring under Kamath panel: Airline execs

Recommendations of the K V Kamath panel for Covid-related stress have failed to enthuse airlines, with industry executives and experts saying the sector doesn’t stand to benefit from the same. The very high parameter set in the resolution framework is a huge challenge, they said.

The committee has advised lending institutions to mandatorily keep five key ratios in mind while framing resolution plans — total outstanding liabilities to adjusted tangible net worth; total debt to Ebitda; current ratio; debt service coverage ratio; and average debt service coverage ratio.

For any airline to be eligible for restructuring, the current ratio has to be equal to or higher than 0.4, while ‘debt to Ebitda’ has to be equal to or less than 5.5.

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