Air India plans to ask govt for re-capitalisation

New Delhi: State-owned carrier Air India has almost firmed up plans to urge the government for its re- capitalisation in order to infuse liquidity and turn it into a viable entity, official sources said on Thursday.
Under the revised plan, Air India's parent company National Aviation Company of India Ltd is likely to seek from the government an equity infusion of Rs 1,231 crore and a soft loan of Rs 2,750 crore.
The plan, once approved by the Civil Aviation and Finance Ministries, would be given a go ahead by the Union Cabinet.
The Finance Ministry is understood to have asked the airline to come up with its future business plan and quantify it in terms of its future earnings and expansion, they said.
The government, being the owner of the 77-year old carrier, would have to infuse liquidity as it has a very small equity base of only Rs 145 crore. In this background, the airline has placed orders for a total of 111 new aircraft worth about Rs 45,000 crore.
12/03/09 PTI/Economic Times

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Categories: NACIL Mar 2009