AI may get additional equity infusion, soft loan

New Delhi: The government is learnt to have decided to infuse additional equity in Air India and also extend a soft loan to the cash-strapped national carrier to enable it to tide over the current financial crisis.
A high-level committee on Saturday asked the Civil Aviation Ministry to move a note on the issue for consideration by the Union Cabinet.
The Committee of Secretaries (CoS), headed by Cabinet Secretary K.M. Chandrasekhar, which reviewed the turnaround plan of Air India, directed the Civil Aviation Ministry to prepare the Cabinet note — in consultation with the Finance Ministry — on the matter and submit it over the next 10 days, official sources said.
Though there was no official confirmation on the quantum of equity infusion and the soft loan, there were indications that the national carrier’s equity base, which now stands at only Rs.145 crore, would be enhanced by about Rs.2,500 crore.
A substantial part of resource mobilisation is likely to be through the issuance of Initial Public Offer or infrastructure bonds, sources said.
At the first meeting of the CoS last month, Air India sought an equity infusion of about Rs.2,500-3,000 crore, and a loan of Rs.10,000 crore at 5-7 per cent interest for repayment over five years.
30/08/09 Vinay Kumar/The Hindu

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Categories: NACIL Aug 2009