Friday, November 30, 2018

Relief for Air India: Govt approves Rs 29,000 crore plan to halve airline’s debt

New Delhi: Amid rising financial burden, the government has approved a bailout package that would help reduce national carrier Air India’s mounting debt.

The government would be transferring as much as Rs 29,000 crore of the airline’s Rs 55,000 crore debt to a Special Purpose Vehicle (SPV), a move that would significantly reduce the airline’s contributions towards annual interest payments, Civil Aviation Secretary RN Choubey said. We are providing a partial but significant relief to Air India, he added.

Choubey further clarified to business portal ET.com that the government is currently deliberating whether the debt (worth Rs 29,000 crore) should be transferred to the SPV from Air India or by taking fresh loans from the SPV to clear at least half of Air India’s existing dues.

The government plans to transfer the airline a working capital debt to the tune of Rs 29,000 crore towards Air India Assets Holding (AIAHL), added the report.

A moneycontrol.com report went on to highlight that the national carrier’s debt is more than Rs 55,000 crore if collaterals are included. An official confirmed that the idea is to leave Air India with just Rs 26,000 crore worth debt on its books.

mid rising financial burden, the government has approved a bailout package that would help reduce national carrier Air India’s mounting debt.

The government would be transferring as much as Rs 29,000 crore of the airline’s Rs 55,000 crore debt to a Special Purpose Vehicle (SPV), a move that would significantly reduce the airline’s contributions towards annual interest payments, Civil Aviation Secretary RN Choubey said. We are providing a partial but significant relief to Air India, he added.

Choubey further clarified to business portal ET.com that the government is currently deliberating whether the debt (worth Rs 29,000 crore) should be transferred to the SPV from Air India or by taking fresh loans from the SPV to clear at least half of Air India’s existing dues.
30/11/18 India Today

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