New Delhi: Discussions on a revival package for beleaguered national carrier Air India are at an “advanced stage”, said Jayant Sinha, Minister of State for Civil Aviation on Wednesday.
Last week, the finance ministry reportedly rejected aviation ministry's proposal to waive Air India's working capital debt of Rs 30,000 crore in one go.
The ministry, however, did not reject the demand for a waiver of the working capital debt, The Economic Times reported.
In August, sources said the Civil Aviation Ministry was in discussions with the finance ministry for a Rs 11,000 crore bailout package for the ailing airline.
Sources in the know said that the Civil Aviation Ministry was working on a bailout package for the carrier, which would be utilised to reduce high-cost working capital loans.
"Cleaning up the balance sheet of Air India will make it attractive for investors as and when the government decides to once again attempt strategic stake sale of the airline," one of the sources had said.
The airline is staying afloat on a bailout package extended by the previous UPA regime in 2012. The national carrier's debt burden was more than Rs 48,000 crore at the end of March 2017.
In the current financial year, the airline has received an equity infusion of Rs 650 crore up to June. A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012.
All government guaranteed loans and interests thereon are being paid by the government by way of equity infusion into the airline.
Under the FRP, the high cost of working capital loans has been converted into long-term debt carrying lesser rates of interest so as to reduce the financial burden on Air India.
In June, the government shelved a plan to sell a majority stake in Air India due to lack of interest from bidders - a setback to its ambitious efforts to rescue the ailing airline that has survived for years using taxpayer funds.
With inputs from agencies
Updated Date: Sep 26, 2018 12:43:52 IST