AI seeks cabinet nod for Rs 5k cr tax-free bonds

Posted By: Staff
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New Delhi, Aug 14: The Civil Aviation Ministry has sought cabinet permission to seek tax-free bonds worth Rs 5,000 crore ($1 billion) and fresh equity from the government to meets its expenses.

Officials said that the bonds were necessary for the ailing national carrier, which was struggling to stay afloat after it accumulated losses worth $ 2 billion, to meet its expenses during the ongoing five year plan that ends 2011 to 2012.

The officials also said, "The airline currently has an equity base of Rs145 crore (less than $30 million) and the fresh equity infusion has been sought to ensure that interest paid on some high-cost debt can be lowered."

They also clarified that these issues will be considered by the cabinet and will not be a part of the mandate to be given to a high-powered ministerial group that Prime Minister is planning to form to look into the issue of high aviation fuel prices.

OneIndia News

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