AI wants Rs 17,500 cr more to clean books

New Delhi: To come out of the financial mess, Air India, in its turnaround plan, will be asking for one-time infusion of Rs 17,500 crore from the government. The turnaround plan has been vetted by financial advisory firm Delloite and will be taken up in a board meeting of the airline slated for next month. The matter will then be referred to the government.
“Air India is asking for Rs 17,500 crore to clean its books and start its finances afresh. This demand is huge considering the airline has not been able to perform in the past,” said a senior ministry official, who did not want to be identified.
This government support, which could be in the form of equity infusion and loan waiver, is set to clean Air India’s books, which has a debt of over Rs 40,000 crore on an equity base of Rs 2,145 crore — it received an equity infusion of Rs 800 crore in 2009-10 and Rs 1,200 crore in 2010-11. Out of the Rs 40,000 crore, working capital debt is at Rs 21,000 crore and the rest are loans taken to fund aircraft acquisition.
The national carrier had ordered 111 aircraft worth Rs 46,000 crore and taken deliveries of 80 aircraft till now.
Air India also has an annual interest payment of around Rs 1,800 crore and has accumulated losses of over Rs 15,000 crore.
25/02/11 Mihir Mishra/Business Standard

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Categories: Air India Feb 2011