GoM undecided over fund infusion into Air India

New Delhi: A group of ministers (GoM) headed by Finance Minister Pranab Mukherjee on Friday discussed plans to invest more state funds into Air India but came to no conclusion. The GoM asked the civil aviation ministry to seek the approval of the Reserve Bank for a plan to restructure Air India's debt.
The ministers discussed a recommendation from a panel of secretaries to infuse Rs 23,000 crore into the national carrier over the next 10 years, out of which Rs 6,600 crore could be invested in the current fiscal ending March 31, 2012.
"Though the meeting was inconclusive, we will go to RBI in a week to get their view on financial restructuring, after which there will be another GoM meet. Thereafter, the cabinet will decide the matter of equity infusion of Rs 6,600 crore," Civil Aviation Minister Vayalar Ravi said after the meeting.
This equity infusion will be inclusive of the Rs 1,200 crore that the government has already provided this year. Over the last three fiscals, the government has injected Rs 3,200 crore by way of equity into the airline.
Air India is in talks with lenders to convert a portion of shortterm working capital, which comes to Rs 22,165 crore, into long-term loans as part of its financial restructuring plan. Long-term loans, which the airline had used to finance aircraft buys, account for a further Rs 20,000 crore of debt.
29/10/11 Anindya Upadhyay/Economic Times

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Categories: Air India Oct 2011