Air India won’t get Rs 15,000-cr bailout

Mumbai: The government has indicated that a bailout package for the crisis-ridden Air India will not be possible beyond $1-1.5 billion (Rs 5,000-5,500 crore) against the $3 billion sought by the aifline. A hectic reworking of the capital restructuring possibilities is underway and is expected to be submitted by June 22.
“An equity infusion of up to Rs 1,500 crore, plus a soft loan of Rs 3,000-3,500 crore will be considered on a priority basis. There is no chance of the Airline receiving a package of Rs 14,000 to 15,000-crore package,” a very senior source in the civil aviation ministry said. “In fact, the civil aviation ministry and Air India are currently involved in the preparation of exact details and a package. It is expected to be submitted around June 22 and thereafter the government will take a final decision,” top government sources told FE on Sunday on the condition of anonymity.
On Saturday, the civil aviation ministry held initial discussions in this regard with the National Aviation Company of India Ltd (Nacil), created through Air India-Indian Airlines merger in 2007. According to sources, the situation for Air India is quite critical and the surge in crude prices to over $70 a barrel has added fuel to the fire. Though auditors are still vetting Nacil’s 2008-09 accounts, it is learnt the airline’s losses are in the range of Rs 5,000 crore instead of the expected Rs 3,000 crore.
An alarmed Nacil board had more than tripled its bailout demand from the Centre, seeking Rs 14,000 crore in equity infusion, soft loans and grants.
08/06/09 Sanjay Jog/Indian Express

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Categories: NACIL Jun 2009