New Delhi: Air India’s working capital requirement is expected to climb to a whopping Rs19,000 crore by the end of this fiscal, if steps are not taken to restructure debt. Already, the ailing airline has Rs17,200 crore loans on its books.
The company’s newly constituted audit committee headed by Harsh Neotia — Anand Mahindra is also a member — has suggested a complete overhaul of the airline’s unsecured debt as well as debt taken to fund an ambitious aircraft purchase plan.
The latter amounts to $10 billion, of which $7 billion is under a sovereign guarantee, or underwritten by the government.
“We need to bring down both working capital requirements and also raise the $7 billion secured debt at concessional rates. We are paying about 11.5% for the unsecured loans and the airline’s total interest and repayment outgo stands at Rs 2,600 crore a year. And it is steadily climbing,” a source in the civil aviation ministry told DNA.
“The audit committee, which held its first meeting last week, has recommended that this huge interest and repayment outgo be brought down to the lowest possible level,” the source said.
10/05/10 Sindhu Bhattacharya/Daily News & Analysis
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