Air India seeks Rs 1,500-crore loan for urgent capital needs
The carrier has Rs 28,000 crore working capital debt and Rs 4,000 crore interest burden.
Air India has called for proposals for short-term loans worth Rs 1,500 crore to meet urgent working capital needs. This is the second time in a little over a month that the carrier has floated tenders for short-term loans.
The debt-laden carrier is surviving on taxpayers’ money, and the government has decided on a strategic disinvestment of Air India to cut these losses. By the end of 2016-’17, Air India’s total debt was Rs 48,876 crore. It has Rs 28,000 crore working capital debt and Rs 4,000 crore interest burden alone, according to the The Financial Express. It has not turned a profit in 10 years, the report said.
The carrier issued the tender on October 18, saying Air India was looking for “government guarantee-backed” short-term loans up to Rs 1,500 crore. The loan would have a tenure up to June 27, 2018, and the deadline could be extended, according to PTI.
Meanwhile, Air India unions said they would meet next week in Delhi to bring all staff unions, including those of pilots and engineers, under a single platform and work out a strategy to deal with the government’s disinvestment plan. Air India has over 20,000 employees on its roll, representing as many as six recognised unions.