After another failed attempt to privatise Air India, the Civil Aviation Ministry is in discussions with the Finance Ministry to provide a Rs 11,000 crore bailout package for the national air carrier, Hans has reported . The proposals are at an initial stage of discussions as per the report.
The package is likely to help Air India to avoid high interest working capital loans. In addition to this, it is believed that a financially healthier Air India is likely to attract investors in future.
"Cleaning up the balance sheet of Air India airline will make it attractive for investors as and when the government decides to once again attempt strategic stake sale of the airline," sources told Hans. Air India has a debt in excess of Rs 48,000 crore as of May 2017.
Last month, the government sought Parliament’s approval for infusing Rs 980 crore into Air India. A financial restructuring plan (FRP) for the airline had earlier been approved by the previous United Progressive Alliance (UPA) government. Under this plan high interest working capital loans were converted to long term loans that have lesser interest rates.
Minister of State for Civil Aviation Jayant Sinha had earlier said FRP includes budgetary support of Rs 30,231 crores over 10 years till the financial year 2020-21.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.