Air India Gets Rs 500-Crore Government Guarantee for Fund Raising
The government has given a Rs 500-crore guarantee to cash-starved Air India which will help it secure fresh funds for operational requirements, a senior airline official said.
Mumbai, December 20: The government has given a Rs 500-crore guarantee to cash-starved Air India which will help it secure fresh funds for operational requirements, a senior airline official said.
Striving to keep afloat due to liquidity issues, the loss-making carrier had last week sought Rs 2,400 crore guarantee from the government for raising funds to mainly meet its operational requirements.
"The government has extended Rs 500 crore guarantee to Air India. It was provided the airline on Wednesday," the official told PTI. Air India Owes Rs 5,000 Crore in Fuel Dues; Hasn't Paid in 230 Days, Say Oil Companies.
The sovereign guarantee will help the airline secure some funds, a part of which has already been drawn, he said adding," Air India is already in discussions with the banks."
The amount of Rs 2,400 crore is part of the Rs 7,600-crore guarantee that was to be provided to the airline in the current fiscal. Air India's net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore.
Last month, Minister of State for Civil Aviation Hardeep Singh Puri informed Parliament that Air India will have to shut business if it is not privatised. The Air India Specific Alternative Mechanism (AISAM) has approved re-initiation of process for the the government's 100 per cent stake sale in Air India along with Air India Express and the carrier's stake in joint venture AISATS.
The government is likely to issue Expression of Interest (EoI) for 100 per cent strategic sale in Air India in the fourth quarter of the fiscal. According to the government, it has infused funds to the tune of Rs 30,520.21 crore in the flag carrier from financial year 2011-12 till Dec 5.