Air India Assets Holding, a special-purpose entity set up last year to hold some of state-owned Air India’s debts and assets, aims to raise INR220 billion rupees (USD3.2 billion) in its first rupee-denominated bond sale to refinance part of the debts, Bloomberg has reported.

It has been seeking bids from bankers since July 3, a source told Bloomberg, specifying that INR145 billion rupees (USD2.12 billion) of the total would be raised through sovereign guarantees.

Around INR295 billion rupees (USD4.3 billion) of Air India’s debt has already been transferred to the special-purpose vehicle with the aim of making it easier for newly reelected Prime Minister Narendra Modi to sell a stake in it.

The airline is saddled with total debts worth $8.4 billion, and according to provisional estimates it lost INR76.35 billion rupees (USD1.11 billion) in the full year to the end of March.

Air India will not have enough money to pay its employees beyond October, unnamed officials have told India's The Economic Times, and is getting by on an INR300 billion rupee (USD4.38 billion) bailout.

Nevertheless, the country's new finance minister, Nirmala Sitharaman, said on July 5 that plans to sell the carrier would be revived, despite an attempt to partially sell it last year failing to find a willing buyer.