As per the extant guidelines, availing of External Commercial Borrowing (ECB) for working capital is not a permissible end-use. On a review of the policy related to ECB and keeping in view the announcement made in the Union Budget for the Year 2012-13, it has been decided to allow ECB for working capital as a permissible end-use for the civil aviation sector, under the approval route, subject to the following conditions:
Airline companies registered under the Companies Act, 1956 and possessing scheduled operator permit license from DGCA for passenger transportation are eligible to avail of ECB for working capital;
ECB will be allowed to the airline companies based on the cash flow, foreign exchange earnings and its capability to service the debt;
The ECB for working capital should be raised within 12 months from the date of issue of the circular;
The ECB can be raised with a minimum average maturity period of three years; and
The overall ECB ceiling for the entire civil aviation sector would be USD one billion and the maximum permissible ECB that can be availed by an individual airline company will be USD 300 million. This limit can be utilized for working capital as well as refinancing of the outstanding working capital Rupee loan(s) availed of from the domestic banking system. Airline companies desirous of availing of such ECBs for refinancing their working capital Rupee loans may submit the necessary certification
Link for the Circular
Airline companies registered under the Companies Act, 1956 and possessing scheduled operator permit license from DGCA for passenger transportation are eligible to avail of ECB for working capital;
ECB will be allowed to the airline companies based on the cash flow, foreign exchange earnings and its capability to service the debt;
The ECB for working capital should be raised within 12 months from the date of issue of the circular;
The ECB can be raised with a minimum average maturity period of three years; and
The overall ECB ceiling for the entire civil aviation sector would be USD one billion and the maximum permissible ECB that can be availed by an individual airline company will be USD 300 million. This limit can be utilized for working capital as well as refinancing of the outstanding working capital Rupee loan(s) availed of from the domestic banking system. Airline companies desirous of availing of such ECBs for refinancing their working capital Rupee loans may submit the necessary certification
Link for the Circular
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