AI faces Rs 67,000 crore worth losses and debt
What is worse is that the ailing national carrier would have to repay a whopping Rs 20,415 crore worth of loans before the end of this fiscal year. If it defaults, the amount would invite loan loss provisioning which the banks may oppose, official sources said.
A meeting of the Group of Ministers slated for tomorrow is expected to decide on moving the Cabinet Committee on Economic Affairs soon for additional equity infusion of Rs 1,200 crore and take a series of other steps to soar up the airline`s financial position.
Latest estimates show that the ailing carrier was facing a net cumulative loss of Rs 20,320 crore between April 2007 and March 2011.
Its debt burden stood at Rs 46,950 crore — Rs 20,185 crore worth of aircraft loans, Rs 22,165 crore working capital loans and over-dues of Rs 4,600 crore. Its cumulative loss and debt burden comes to a whopping Rs 67,270 crore.
To overcome this financial rut, Air India is seeking an upfront equity infusion of Rs 6,600 crore from the government for immediate relief and another Rs 5,736 crore to fund cash deficits spread over ten years till FY 2021.
As part of its turnaround and financial restructuring plans, it proposes to issue redeemable preference shares for over Rs 7,400 crore out of the Rs 22,165 crore working capital loans with eight per cent dividend. It also proposes steps to enable it repay over Rs 11,100 crore of loans at 11 per cent interest over a 15-year period.