Air India reaches deal on fuel dues

New Delhi: Air India Ltd has agreed to partially pay off its dues to oil marketing companies and negotiated a daily payment system for the next 45 days, after which it hopes to repay in full.
The national flag carrier owed Rs. 2,300 crore to state-owned Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd in early December, when the oil firms discontinued credit to the airline on a directive from the oil ministry, as Mint reported on 10 December.
Air India has now agreed to pay a lump sum of Rs. 475 crore, or a little more than one-third of the Rs. 1,200 crore it received as equity infusion from the government this month.
The agreement was reached in a meeting of Air India chairman Arvind Jadhav, oil ministry’s additional secretary and financial adviser P.K. Sinha and officials from oil companies and the aviation ministry, said two officials present at the meeting, asking not to be named.
“They have got a relief,” one of these officials said. “They have also promised to pay some more money from receivables as and when they get it from other government departments.”
24/01/11 Tarun Shukla/Live Mint

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Categories: Air India Jan 2011