AI closer to raising equity base to Rs 945 cr

New Delhi: Air India has moved a step closer to seeing its equity base being raised to Rs 945 crore from the current level of Rs 145 crore.
The Ministry of Civil Aviation will soon send a note to the Union Cabinet seeking its approval for an equity infusion of Rs 800 crore into the State-owned airline.
“The minutes of the Group of Ministers’ meeting where the equity proposal was approved has been received. We can now start the process of getting Cabinet approval for release of the funds,” a senior Government official told Business Line.
Official sources pointed out that Air India has never received budgetary support except for Rs 568 crore — through a mixture of equity and loan — which was recapitalised to Rs 145 crore after the merger of Air India and Indian Airlines.
“In the past, fleet acquisition was financed through internal resources. But, now, given the gap of about 20 years between aircraft acquisition and the magnitude of debt burden and falling revenues, some financial support from the Government, which is our major shareholder, is needed,” sources said justifying the Government pumping in funds into the airline.
As and when the funds are released, Air India will join a growing number of global airlines that have been provided with more than $5 billion by various governments since 2001.
23/11/09 Ashwini Phadnis/Business Line

To Read the News in full at Source, Click the Headline

Categories: NACIL Nov 2009