State-run Air India has sought proposals for short term loan worth Rs 1,500 crore to meet 'urgent' working capital needs. The state carrier on Wednesday issued a document, saying that Air India is looking for "government guarantee backed Indian Rupee short term loans totalling up to Rs 1,500 crore to meet its urgent working capital requirements".
The loan will have a tenure up to June 27, 2018 from the date of being availed and the deadline could be extended. "The amount of Rs 1,500 crore will be drawn in one to three tranches. The Government of India guarantee, is valid up to June 27, 2018 or till the date of disinvestment," Air India said.
The state airlines has requested the banks to submit their proposals - financial bids along with the amount they are willing to provide - by October 26. "Air India would like to draw the short term loan within three working days after awarding the acceptance letter to the successful banks," the state-run airline stated.
This is the second such tenders that Air India has floated for short term loans. Earlier in September, the national carrier had proposals for short-term loans of up to Rs 3,250 crore. Recently, Air India tied up with public sector lender Punjab National Bank and private lender IndusInd bank to secure loans to the tune of over Rs 3,000 crore. Reports suggest that the money was sought to repay the dues to the airport operators, oil companies and other vendors.
As part of a turnaround plan approved by the previous UPA regime, Air India was to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. So far, the debt-laden carrier has received around Rs 26,000 crore under the package. The 10-year bailout package began from 2012.
Air India is under massive pressure for its mounting debts and which is why the government is planning for disinvestment of the airline. This year in June, the Cabinet Committee on Economic Affairs gave its in-principle nod for the strategic disinvestment of the airline which has a debt burden of more than Rs 50,000 crore.
Air India chief Rajiv Bansal recently asked its officials not to waste even a single paisa. "Cost consciousness is another core area to improve the financial health of the company. While we strive to make improvements in our services, be it in-flight catering or entertainment, aircraft cabin ambiance, lounges and offices, we must ensure that not even a single 'paisa' is wasted," the Air India chief had said.
Earlier this month, Tata Group Chairman N Chandrasekaran disclosed the conglomerate's interest in acquiring controlling stake in Air India, confirming earlier. He, however, stated that more details from the authorities' end are awaited before Tata Group can take a definitive stance on the matter.
(With inputs from PTI)