Air India has asked the government to restore equity infusion after it failed to find any buyers in its privatisation bid. The Congress-led UPA government had approved a turnaround plan under which Air India was to receive a total equity infusion worth Rs 30,231 crore up to 2021. So far, the state-run airline has received more than Rs 26,000 crore under the bailout package.
Air India had received about Rs 3,000-4,000 crore equity infusion on an average per fiscal from the government till financial year 2014. However, after that the amount was gradually reduced. A senior airline official told PTI that they "...have sought restoration of the equity infusion in Air India and have written to the government last week in this regard." He, however, did not disclose the amount of the funds the airline was looking at.
Air India's equity infusion request has come days after the government informed that it had not received any bid for the national carrier's strategic disinvestment.
This year in March, the government proposed to sell 76 per cent equity share capital of the debt-ridden national carrier as well as transfer the management control to private players. The decision to privatise the national airline was taken due to its massive debt.
In 2016-17, Air India's total debt was Rs 48,447.37 crore which included aircraft and working capital loans of Rs 17,359.61 crore and Rs 31,087.76 crore, respectively. For 2018-19, the airline has been allocated Rs 650 crore in view of its now failed disinvestment plan.
Experts believe that the government will have to change its term if it wants to sell Air India. Some of the terms that seemed stringent were: It wanted to sell 76 per cent of the airline - which included 100 per cent of Air India Express and 50 per cent of Air India SATS, it wanted the buyers to take on about two-thirds of the debt and liabilities to the tune of Rs 33,392 crore, and give a guarantee that none of the permanent employees are sacked for one year.
(With inputs from PTI)
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