Rs 19,911 cr equity lifeline for AI during 12th Plan

Bangalore: The civil aviation ministry has committed an equity infusion of Rs 19,911 crore into Air India during the 12th plan. The commitment came in the ministry’s approach paper to the plan.
The amount is over and above the last few rounds of equity infusions that have taken the carrier’s paid-up capital to Rs 3,345 crore. The new rounds of infusion, bankers say, will be u­sed partly to ca­pitalise so­me of Air In­dia’s debt, wh­ich now st­ands at Rs 48,000 crore. Of this debt, Rs 20,000 crore is owed to domestic banks; a restructuring of this part is under way.
In the last round of negotiations, bankers sought a sovereign guarantee on the debt and turned down an SBI Caps’ suggestion that Rs 8,000 crore of the debt be converted into cumulative redeemable preference shares.
The bankers also suggested that the debt be converted into bonds and the amount be considered part of their statutory liquidity ratio (SLR) obligations. In that event, the bonds would be liquid and help banks meet their cash requirements from the Reserve Bank of India at the liquidity adjustment facility auctions.
24/01/12 C Shivkumar/mydigitalfc.com

To Read the News in full at Source, Click the Headline

Categories: Air India Jan 2012