Lenders may ask for Air India's partial divestment

New Delhi: The lenders of Air India may ask the government for partial divestment of the national carrier. The lenders will take a final call on this issue when the core committee of lenders meets next week according to two bankers involved in the negotiations.
'The airline needs consistent operational stability and that can be ensured if a private player is brought in' said a senior Central bank official who did not want to be named. The source added that there is no need for a huge divestment. The quantum can be decided by the government based on its comfort level.
According to FDI rules, foreign airlines are not allowed to pick up stakes in Indian carrier. The lenders are not happy with the debt restructuring proposal of Air India.
The total debt on Air India's books stands at over Rs 40000 crore, of which around Rs 20000 crore is for working capital and the remaining for aircraft purchase.
31/05/11 Sameer Hashmi/Economic Times

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Categories: Air India Jun 2011