New Delhi: For the second time in a year, the Union ministry of finance has extended a sovereign guarantee to Air India to raise cheaper funds from banks.
The approval would enable the airline to negotiate with banks to raise Rs 2,000 crore from financial institutions, as the government is not in a position to infuse the scheduled resources into the debt-laden government carrier.
A senior civil aviation ministry official said, “The airline would use the Rs 2,000 crore it raises to clear dues to oil companies and airport operators.” As of this March, the AI group owed Rs 1,540 crore to the Airports Authority of India.
“The current account deficit is at an all-time high. There is a resource crunch in the finance ministry and it has become difficult for the government to infuse funds. There is a shortfall of around Rs 2,500 crore in the total sum of Rs 15,600 targeted for infusion in the airline in FY13 and FY14.” said a senior AI official.
The airline had approached the government for extending a sovereign guarantee to enable it to get cheaper loans.
raed news in full 16/10/13 Sharmistha Mukherjee/Business Standard
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