Funds infusion: Delay in proposal may cost AI dear

New Delhi: Air India has missed the bus. The delay in sending its Rs 14,000 crore fund infusion proposal to the Government means that the carrier’s request will not be met in the Union Budget 2009-10 which is to be presented in July.
The delay is being attributed due to procedural problems, including the change of guard at the very top in the airline. The airline, which currently has an equity base of Rs 145 crore, is seeking Rs 5,000 crore as equity infusion.
In addition, it wants Rs 7,000 crore as a soft loan, the repayment for which will begin five years after the loan is granted.
“The airline is keen that repayment for the soft loan be at 5 per cent rate of interest.
At the moment, it seems highly improbable that the fund will be made available through the Budget as the proposal is yet to reach the Government. Being a PSU, such a large investment will have to be through the Budget and be approved by Parliament,” a senior Government official said.
10/06/09 Business Line

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Categories: NACIL Jun 2009