Friday, September 21, 2018

Finmin considering Air India bailout but rules out waving off debt at one go: Report

The Finance Ministry is still discussing a request for a bailout for the national carrier, but has ruled out the option of waving off Air India’s working capital debt of Rs 30,000 crore at one go, The Economic Times reported.

"They have other considerations and the money will not come in one go but would come in installments. Air India needs to get rid of its debt trap and a one-time support by the government would have helped Air India," a senior aviation ministry official told the paper.

He added that the other options on the table include a combination of equity and debt. An infusion of cash into the national carrier is essential for it to meet financial commitments. The airline's debt burden had warded off potential bidders when the government put it up for sale earlier this year.

The government wants the airline to be in shape for sale after the 2019 Lok Sabha elections after it failed to find buyers for a 76 percent stake in the airline, the report said.

The Aviation Ministry had sought the waiver of Air India's Rs 30,000-crore debt, and also the infusion of cash to the tune of Rs 10,000-11,000 crore  after its divestment plan was called off.
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