Air India seeks govt nod for ₹2,400 crore loan from NSSF

  • The NSSF loan is like borrowing from the govt and it is about 0.5% cheaper compared to commercial banks
  • Air India is currently surviving on a 30,000 crore bailout plan cleared by the UPA-II govt in 2012

Nirbhay Kumar (with inputs from IANS)
Updated29 May 2019, 05:31 PM IST

New India: Disinvestment-bound Air India has sought the government's approval to borrow 2,400 crore from National Small Savings Fund (NSSF), a pool of small savings from households, to meet its working capital requirements.

The airline, which has seen its total debt ballooning to 58,000 crore, made the request at a meeting on 14 May of all the top bosses of agencies working under the Civil Aviation Ministry. The meeting was chaired by Civil Aviation Secretary Pradeep Singh Kharola.

The Aviation Secretary is, however, learnt to have advised Air India to discuss its financial issues separately.

'This is fresh requirement beyond what had been approved earlier,' said a senior Air India official.

Explaining the justification for fresh demand, the official said that the government was to give Air India a financial support of 2,484 crore, the balance of the budgetary support.

'This could be provided as a Government of India (GoI) guarantee or in the form of loan. If it gives us guarantee, we can borrow from the bank. In case the support comes as loan, the interest would be directly paid to the government. The NSSF loan is like borrowing from the government and it is about 0.5% cheaper compared to commercial banks,' he said.

The airline's ever-increasing hunger for loans indicates its precarious financial health. This also raises questions over timing of the airline's disinvestment.

But top sources in the government said the disinvestment of Air India would be done in the next few months given that it is one of the unfinished agendas of Narendra Modi-led government.

"Going at the current pace, the EoI (expression of interest) for the sale of Air India will soon be out. Disinvestment of the airline is now a matter of months," said a senior government official.

Meanwhile, the airline has put its expansion plan on hold in the wake of the disinvestment plan. It would not take any new aircraft on lease and network expansion would be done only by making more grounded aircraft operational.

Air India is currently surviving on a 30,000 crore bailout plan cleared by the UPA-II government in 2012.


Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:29 May 2019, 05:31 PM IST
Business NewsCompaniesNewsAir India seeks govt nod for ₹2,400 crore loan from NSSF

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Wipro share price

    525.40
    10:31 AM | 8 OCT 2024
    -6 (-1.13%)

    Tata Steel share price

    160.20
    10:32 AM | 8 OCT 2024
    -4.1 (-2.5%)

    Bharat Electronics share price

    275.20
    10:32 AM | 8 OCT 2024
    7.85 (2.94%)

    Tata Motors share price

    910.60
    10:32 AM | 8 OCT 2024
    -17.5 (-1.89%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Dr. Lal Pathlabs share price

    3,541.00
    10:28 AM | 8 OCT 2024
    80.1 (2.31%)
    More from 52 Week High

    Caplin Point Laboratories share price

    1,847.00
    10:28 AM | 8 OCT 2024
    -84 (-4.35%)

    Cholamandalam Financial Holdings share price

    1,916.20
    10:21 AM | 8 OCT 2024
    -60.5 (-3.06%)

    Sobha share price

    1,689.45
    10:28 AM | 8 OCT 2024
    -49.65 (-2.85%)

    Finolex Industries share price

    286.00
    10:25 AM | 8 OCT 2024
    -8.1 (-2.75%)
    More from Top Losers

    Varun Beverages share price

    573.65
    10:28 AM | 8 OCT 2024
    31.85 (5.88%)

    One 97 Communications share price

    689.00
    10:28 AM | 8 OCT 2024
    37.4 (5.74%)

    EPL share price

    268.30
    10:28 AM | 8 OCT 2024
    14.35 (5.65%)

    Doms Industries share price

    2,580.00
    10:28 AM | 8 OCT 2024
    111.5 (4.52%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      77,455.00-220.00
      Chennai
      77,461.00-220.00
      Delhi
      77,613.00-220.00
      Kolkata
      77,465.00-220.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.75/L0.00
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00

      Popular in Companies

        HomeMarketsloanPremiumMint Shorts