Cash-strapped Air India Ltd plans to start negotiations with a consortium of banks to restructure debt after its board approved a proposal for a financial turnaround on Tuesday.
“An official turnaround plan is in place. We can now go to banks for finances,” Air India chairman and managing director Arvind Jadhav said on the sidelines of a seminar in Mumbai on Wednesday.
Jadhav said the state-owned airline will approach the Reserve Bank of India (RBI) for approving the debt recast after making some changes to the proposed interest rates.
The turnaround plan, prepared by consulting firms Deloitte Consulting India Pvt. Ltd and SBI Capital Markets Ltd, includes hiving off ground-handling and aircraft maintenance divisions into separate units.
“We have sent those proposals to cabinet for approval,” Jadhav said.
Air India has accumulated losses of at least Rs.13,300 crore since its merger with Indian Airlines in 2007, aviation minister Vayalar Ravi told the Rajya Sabha on 10 March. Before the merger, the losses reported by the erstwhile Air India and Indian Airlines were Rs.447.93 crore and Rs.240.29 crore, respectively, Ravi said.
17/03/11 P.R. Sanjai/Live Mint
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