Interest on AI’s loans may be reduced with govt guarantee

New Delhi: After receiving a shot in the arm of Rs 800 crore recently, state-owned Air India may get some relief in the form of a ‘letter of comfort’ from the government to convert its high-cost loans into low-cost ones. The carrier has mopped up loans of around Rs 18,000 crore, of which nearly Rs 11,000 crore are high-cost loans.
The move has been given in-principle approval by the finance ministry, after being considered by the group of ministers, constituted to look into aviation-related issues, in its last meeting, said senior government officials. For a long time now, the loss-making carrier had demanded government guarantee for the loans so as to bring down the annual interest burden of around Rs 2,000 crore.
Air India raised around Rs 1,000 crore after the board enhanced its working capital limit from Rs 17,000 crore to Rs 18,000 crore. The rate of interest hovered around 11 per cent, said an airline official.
12/03/10 Smita Aggarwal/Indian Express

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

Categories: NACIL Mar 2010