The trouble with socialism, it has been said, is that you run out of money. Well, not in India, or so it seems. The truism, widely attributed to Margaret Thatcher, has been set up for a reality check.
The context is Air India. The national carrier finds itself, yet again, in the “rescue me” queue. This time around – after sinking public monies and staking sovereign guarantees – the government is looking at an “innovative” bailout.
The innovation: the conversion of Rs 28,000 crore – out of the Rs 46,570 crore that the airline owes 31 institutions – into equity, inducting professionals with proven skills, and listing of the airline.
Simplicity can be seductive. Effectively, lenders are expected to forsake interest earnings for a slice of ownership and the promise of dividend – ownership in a flailing enterprise ranked the world’s third worst-performing in 2016, and returns from an airline that has reported net losses of Rs 6,279 crore, Rs 5,859 crore and Rs 3,836 crore in the past three years.
13/02/17 Shankkar Aiyar/The Quint
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The context is Air India. The national carrier finds itself, yet again, in the “rescue me” queue. This time around – after sinking public monies and staking sovereign guarantees – the government is looking at an “innovative” bailout.
The innovation: the conversion of Rs 28,000 crore – out of the Rs 46,570 crore that the airline owes 31 institutions – into equity, inducting professionals with proven skills, and listing of the airline.
Simplicity can be seductive. Effectively, lenders are expected to forsake interest earnings for a slice of ownership and the promise of dividend – ownership in a flailing enterprise ranked the world’s third worst-performing in 2016, and returns from an airline that has reported net losses of Rs 6,279 crore, Rs 5,859 crore and Rs 3,836 crore in the past three years.
13/02/17 Shankkar Aiyar/The Quint
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