State-owned Air India has approached the ministry of finance for a sovereign guarantee to raise Rs 2,500 crore from banks, due to the government’s inability to infuse all the required funds into the debt-laden carrier, given the current economic conditions.
“The current account deficit is at an all-time high. There is a resource crunch in the finance ministry, due to which it has become difficult for the government to infuse funds. There is a shortfall of around Rs 2500 crore in the total sum of Rs 15,600 crore targeted for infusion in the airline in FY13 and FY14,” said a senior AI official.
The ministry of civil aviation has already asked the finance ministry to provide a sovereign guarantee. The official added, “It will enable us to avail of loans at a cheaper rate. We can utilise the money to clear dues to vendors and airport operators.” As of March, the AI group owed Rs 1,540 crore to the Airports Authority of India.
The carrier was scheduled to get an equity infusion of Rs 5,000 crore in 2013-14 as part of a turnaround plan cleared by the cabinet. According to the plan, the government is to infuse Rs 30,000 crore over nine years, starting 2012-13. As much as Rs 10,600 crore was to be infused by the government in the latter year; the carrier got only Rs 6,000 crore.
13/09/13 Sharmistha Mukherjee/Business Standard
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“The current account deficit is at an all-time high. There is a resource crunch in the finance ministry, due to which it has become difficult for the government to infuse funds. There is a shortfall of around Rs 2500 crore in the total sum of Rs 15,600 crore targeted for infusion in the airline in FY13 and FY14,” said a senior AI official.
The ministry of civil aviation has already asked the finance ministry to provide a sovereign guarantee. The official added, “It will enable us to avail of loans at a cheaper rate. We can utilise the money to clear dues to vendors and airport operators.” As of March, the AI group owed Rs 1,540 crore to the Airports Authority of India.
The carrier was scheduled to get an equity infusion of Rs 5,000 crore in 2013-14 as part of a turnaround plan cleared by the cabinet. According to the plan, the government is to infuse Rs 30,000 crore over nine years, starting 2012-13. As much as Rs 10,600 crore was to be infused by the government in the latter year; the carrier got only Rs 6,000 crore.
13/09/13 Sharmistha Mukherjee/Business Standard
