New Delhi: The ministry of civil aviation is in no mood to lie low to the finance department's sudden decision of giving national carrier Air India a sovereign guarantee based on its performance, to resolve which minister Ajit Singh will soon meet his finance counterpart P Chidambaram.
As per Air India's financial restructuring plan approved this April, the government aims to convert Rs 18,500 crore of the national carrier's short-term debt into long-term borrowings. For this Air India will issue government guaranteed non-convertible debentures (NCD) worth Rs 7,400 crore to financial institutions and banks to repay part of working capital loans.
However, the finance ministry has decided to link this guarantee on bonds with Air India's operational performance—something which is actually linked for equity infusion into the airline. The aviation ministry thinks that conditionality will kill the very purpose of government backing.
25/09/12 Anindya Upadhyay/Economic Times
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As per Air India's financial restructuring plan approved this April, the government aims to convert Rs 18,500 crore of the national carrier's short-term debt into long-term borrowings. For this Air India will issue government guaranteed non-convertible debentures (NCD) worth Rs 7,400 crore to financial institutions and banks to repay part of working capital loans.
However, the finance ministry has decided to link this guarantee on bonds with Air India's operational performance—something which is actually linked for equity infusion into the airline. The aviation ministry thinks that conditionality will kill the very purpose of government backing.
25/09/12 Anindya Upadhyay/Economic Times
