Debt-laden Air India may turn to the Centre for financial help in the wake of non-availability of short-term debt worth Rs 500 crore from various banks, said media report.
If the state-run Air India's plan to raise the money from banks is successful, the airline will utilise the proceeds to meet its working capital requirements and service the interest on outstanding loans, reported Mint.
“The loan should materialise in the coming fortnight or so. If the short-term loan doesn’t come through, we will wait for the (equity) infusion from the government, which will happen during the winter session of Parliament,” an Air India official, requesting anonymity, was quoted as saying by Mint.
The cash-strapped Air India has been struggling to cut its costs and explore ways to enhance revenues for bringing down the debt burden. The national carrier is also trying to raise funds to meet its capital requirements.
Earlier on Monday, an official said that the government expected to mop up about Rs 9,000 crore by selling off land and real estate properties of Air India.
The sale of land, building and other realty assets is part of the government's plan to trim the Rs 55,000 crore debt burden of Air India as this will make the airline competitive and fetch a better valuation when the government plans strategic sale of national carrier again.
Finance Minister Arun Jaitley-headed ministerial panel had last week approved transferring Rs 29,000 crore debt to a special purpose vehicle (SPV) — Air India Asset Holding Company.
The funds raised through sale of the properties would be used to reduce the Rs 29,000 crore debt, held in the SPV.
"We are looking to raise about Rs 9,000 crore from sale of land and property assets of Air India. These include Airlines House in Bombay, realty property in Delhi's Vasant Vihar and land in Baba Kharak Singh Marg, next to Connaught Place," an official told PTI.
Last week the ministerial panel on Air India disinvestment had cleared strategic sale of Air India ground handling subsidiary Air India Air Transport Services Limited (AIATSL).
The proceeds from sale of AIATSL will also be used to reduce the debt held in the SPV.
AIATSL earned Rs 61.66 crore profit in financial year 2016-17.
"We are going step by step to reduce the debt of Air India. When we hit the markets again with strategic sale of Air India, potential investors will find it lucrative to purchase the carrier. These are all steps towards sale of Air India," the official added.
The national carrier had in September invited bids to sell its properties located across India. The airline had put up for sale 28 flats in Mumbai, seven flats in Ahmedabad, and two flats and an office space in Pune, besides several other properties across the country.
The government had originally proposed to offload 76 percent equity share capital of the national carrier as well as transfer the management control to private players.
However, the stake sale failed to attract any bidders when the bidding process got completed on 31 May. In June, the ministerial panel decided not to go ahead with Air India stake sale in an election year.
It was decided to make Air India competitive by way of cutting down debt and raising resources by selling land assets and other subsidiaries.
— With PTI inputs
Updated Date: Dec 06, 2018 14:16 PM