Will This Change Maharaja’s Fortunes? Government Seeks Parliament’s Nod For Rs 2,345 Crore Grant To Air India

Will This Change Maharaja’s Fortunes? Government Seeks Parliament’s Nod For Rs 2,345 Crore Grant To Air IndiaAn Air India flight (Wikimedia Commons)

Air India could soon get equity infusion worth Rs 2,345 crore as part of the financial turnaround plan to meet its working capital requirements, reports Financial Express.

The government has sought the Parliament’s approval to grant Rs 2,345 crore to the ailing carrier and 1,300 crore for Air India Asset Holding Company, the special purpose vehicles (SPV) holding the airline’s debt.

The proposal was part of the supplementary demands for grants 2018-19 tabled by finance minister Arun Jaitley in the Lok Sabha.

Air India was supposed to get Rs 30,231 crore as per a 10-year bailout package announced in 2012. The airline, till now, has already received funds to the tune of Rs 27,264 crore.

After a failed attempt to privatise Air India earlier this year, government is working on a new model to change Maharaja’s fortunes.

The government, last month, decided to transfer Rs 29,000 crore of Air India’s current debt of Rs 55,000 crore to the SPV.

Under the government’s plan, all non-core assets belonging to Air India like land, buildings, etc. would be transferred to it. The funds raised through selling these assets would be used to reduce the Rs 29,000-crore debt, held in the SPV.

The government is hoping to make the airline competitive before trying another of its strategic sales.

According to the report, a proposal for strategic sale of Air India’s ground handling subsidiary, Air India Air Transport Services Limited, was recently cleared by a ministerial panel.