BackAir India to raise ₹500 crore via short-term borrowings
The short-term loan will be drawn in September in one or more tranches
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Mumbai: National carrier Air India is looking to raise ₹ 500 crore through short-term borrowings to meet its working capital requirement. The short-term loan will be drawn in September in one or more tranches, according to the bid document.
“Air India is inviting bids for government-guaranteed short-term loans totalling ₹ 500 crore to meet its urgent working capital requirement," the bid document said. The tenure of the loan will be for one year (renewable) from the date of availing the loan. Banks have been asked to submit their bids by 10 September.
In July, the government had sought Parliament’s approval for ₹ 980 crore in supplementary grants towards equity infusion in the national carrier. The airline is yet to get the amount though.
This is the second time in the current fiscal that the airline is borrowing to finance its working capital needs. In June, the domestic carrier had borrowed ₹ 1,000 crore via short-term loans to pay staff salaries and meet other obligations, following a failed privatisation attempt. Its debt is estimated to be over ₹ 50,000 crore, and it had borrowed ₹ 6,250 crore from various banks between September and March quarters last fiscal.
Air India is staying afloat on a bailout package extended by the government in 2012, as part of a turnaround plan and a financial restructuring plan. In the current fiscal, it has received an equity infusion of ₹ 650 crore up to June. It is to receive a budgetary support of ₹ 30,231 crore over a 10-year period ending March 2021. It has received an equity infusion of ₹ 27,195.21 crore so far.
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