AI seeks Rs6,600 crore equity infusion
13 Jul 2011
New Delhi: Even as reports filter in that the finance ministry has turned down the aviation ministry's request to release Rs105 crore to state-owned Air India (AI) it is now being reported that the badly indebted carrier has asked for an upfront equity infusion of Rs6,600 crore, including the Rs1,200 crore announced in this year's budget, in this financial year.
The infusion is a necessary precondition set by the carriers' bankers to implement a proposed restructuring plan.
Air India has been struggling in vain to recover huge sums of money owed to it by the home and defence ministries owe for VVIP flights operated by the airline on their behalf.
The carrier was hoping that clearance of the owed amount of Rs105 crore could be utilise d to clear a short-term loan of Rs200 crore taken last month for 15 days from a bank to pay staff salaries.
A group of ministers formed to consider AI's woes is due to meet next week to discuss ways and means of keeping the airline alive.
AI placed its request for additional equity infusion before a finance ministry sub-committee headed by special secretary (expenditure) Vilasini Ramachandran. The committee has been formed by the finance minister to look into the carrier's debt restructuring plan.
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