Urgent capital needs: Air India plans to take Rs 3,250 crore loan
To meet urgent working capital requirements, Air India is planning to take short-term loans of up to Rs 3,250 crore.
The disinvestment-bound airline , which is staying afloat on taxpayers' funds, expects to get the central government's guarantee for the proposed borrowings shortly.
As part of efforts to revive the loss-making airline, a ministerial panel is working on the modalities for strategic disinvestment of Air India and its five subsidiaries.
Against this backdrop, the airline seeking short-term loans assumes significance as it implies possible funds crunch.
In a tender document issued on Wednesday, the carrier said it is "looking for government guarantee backed INR short-term loans totalling up to Rs 3,250 crore in the first phase to meet its urgent working capital requirements by September 25, 2017".
The tenure of the loan will be one year and the amount is proposed to be drawn in two or three tranches.
A senior official said the airline is already facing "cash deficit" and the loans will help in meeting immediate capital requirements.
"The Government of India guarantee, which is expected shortly, will be valid for a period of one year or till the date of disinvestment," the document said.
Banks have been asked to submit their financial bids by September 19, indicating the amount of government-guaranteed short-term loans they are willing to offer.
Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. The 10-year bailout package began from 2012.
So far, the embattled carrier has received around Rs 26,000 crore under the package.
The Cabinet Committee on Economic Affairs (CCEA) gave its in principle nod to the strategic disinvestment of the airline which has a debt burden of more than Rs 50,000 crore in June this year.