Thursday, August 30, 2018

Government to infuse Rs 980 crore as equity in Air India to service debt

After an SOS from Air India that it does not have money to service debt, the government is set to infuse Rs 980 crore as equity in the national carrier next week.
A substantial part of these funds — about Rs 550 crore — will be used to service interest on nonconvertible debentures that are due in September-end. Air India, as part of its turnaround plan, had issued government-guaranteed NCDs worth Rs 7,400 crore to repay bank loans.
“The rest of the money will be used to pay for spares for our planes, which are currently on ground and will soon be flying. We will also be paying our international and other vendors,” said a senior Air India official who did not want to be identified.
The funds are part of an infusion of Rs 30,231 crore over a period of nine years as part of the turnaround plan approved in January 2013. With this amount, AI would have received about Rs 29,730 crore – or 98% – of the promised equity.
30/08/18 Mihir Mishra/Economic Times