Further equity infusion required in Air India: Patel

New Delhi: With a mounting debt burden, Air India would require additional equity even after the government infuses Rs 1,200 crore in the next few weeks, Civil Aviation Minister Praful Patel has said.
"Further equity infusion is required. The Committee of Secretaries had also recommended an infusion of Rs 5,000 crore," he told PTI when asked whether more equity infusion would be required after the government grants the ailing national carrier Rs 1,200 crore in the next few weeks.
The government had infused Rs 800 crore as additional equity in Air India in the last financial year, primarily to help in reducing its huge debt burden.
Sources said the airline had asked the government for Rs 2,000 crore in the next financial year as additional equity, which has been approved by the Civil Aviation Ministry.
Noting that Air India's actual debt burden was about Rs 18,000 crore, Patel said that "when they buy planes, definitely their debt will go up. The problem is with its working capital, which has to be raised to Rs 7,000-8,000 crore."
So, the additional debt of about Rs 10,000 crore, needs to be addressed, he said in reply to questions. The national carrier's debt on account of fleet acquisition is about Rs 20,000 crore.
19/12/10 PI/Times of India

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Categories: Air India Dec 2010