Air India gets government-backed Rs 6,000 crore loan
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NEW DELHI: In a bid to ensure Air India does not run out of cash before it is sold off, the government has ensured that the Maharaja gets a loan of up to Rs 6,000 crore to meet expenses. The airline was supposed to get Rs 2,500 crore this fiscal according to the equity infusion plan and is facing a shortfall of Rs 700 crore.
“We have obtained government guarantee to enable AI to borrow up to Rs 6,000 crore for meeting cash deficit in the run-up to disinvestment. Our expectation is that the AI management will improve fleet utilisation and ontime performance to improve its valuation prior to the disinvestment,“ aviation secretary R N Choubey told TOI. The airline has so far got about Rs 26,000 crore as equity infusion out of the total Rs 31,200-odd crore promised by the UPA as part of its financial restructuring and turnaround plan. “We were facing a shortfall of Rs 700 crore in equity infusion this fiscal. However, now we have arranged for loan and are okay for the next few months,“ said a senior AI official.
The government has started the process of appointing transaction advisers and valuators for AI. The Department of Investment and Public Asset Management (DIPAM) will manage this process.
Meanwhile, the group of ministers headed by FM Arun Jaitley will also work on a Plan B for AI in case the airline and its subsidiaries are not able to get the right price from parties that have formally shown interest in its divestment.
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