New Delhi, Feb 18 (ANI): The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved the release of Rs.800 crore as equity induction in the National Aviation Company of India Limited (NACIL).
The equity induction would not only ease the cash flow situation of the company but would also preclude borrowings from the markets at a high cost.
In June 2009, it was decided that the NACIL would come out with a financial restructuring Plan and its turnaround plan would be closely monitored by Committee of Secretaries.
Thereafter, a Group of Ministers (GoM) was also constituted to consider the financial position of NACIL and its request for financial support.
The GOM after detailed discussion approved the release of funds to the extent of Rs.800 crore in tranches of Rs.400 crore a month in the form of equity and decided to recommend the equity induction in NACIL for approval of the CCEA.
The NACIL's present paid up equity capital of Rs.145 crore is not sufficient for an aviation company of its size.
The company is currently struggling to address costly legacy assets, a weakening revenue stream and high cost structure resulting in rising liabilities. (ANI)