Nod for AI's revamp, equity infusion plan likely soon: Patel
30 October 2010
Cash-strapped national carrier Air India is likely to get some much-desired relief as the Reserve Bank of India is expected to clear a debt restructuring plan for the airliner by November, minister for civil aviation Praful Patel said on Friday. Air India is carrying a debt burden of Rs 19,000 crore.
Patel also said the airline will get the next round of equity infusion of around Rs1,200 crore soon, as the cabinet committee for economic affairs (CCEA) has raised no issues which need sorting out as a pre-condition.
''CCEA will review the progress of Air India and give the budgeted amount in November,'' he said. The minister was, however, silent on whether the airline has achieved the milestones CCEA had earlier specified as a precondition.
The airline is also hopeful that RBI would approve its debt restructuring plan by November, Patel said. ''SBI Caps has sent a proposal to the banking regulator. We see no reason for RBI to reject the proposal, as the regulator has in-principle agreed the aviation sector needs support,'' he said, noting the central bank had already approved similar plans for privately-owned Kingfisher Airlines.
The government had in the last financial year infused Rs800 crore into NACIL, till recently the holding company for Air India, to help the airline reduce its losses and mounting debt.
Patel was in Mumbai reviewing policy and restructuring initiatives undertaken by the Air India management for a turnaround plan and also for ''belt-tightening'' which is currently under way, though he refused to give details of these measures.