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Finance ministry refuses Rs 300-bn fund-infusion proposal for Air India

Airline told to transfer non-core assets, subsidiaries to special purpose vehicle

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Finance Ministry

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The has turned down Rs 300-billion fund-infusion proposal for in the absence of a clear turnaround plan. The had sought the package to wipe out the debt obligation of the state-owned airline, defaulting on salary disbursements and payments to vendors.

The has instead asked the airline to transfer its non-core assets and subsidiaries to a special purpose vehicle (SPV). Those assets would be monetised to reduce the company’s unsustainable portion of the debt. Of the Rs 500-billion total debt, around Rs 220 billion has been termed unsustainable, implying it cannot be serviced with the cash flow income.

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Finance ministry refuses Rs 300-bn fund-infusion proposal for Air India

Finance ministry refuses Rs 300-bn fund-infusion proposal for Air India

First Published: Wed, August 22 2018. 12:29 IST
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Finance ministry refuses Rs 300-bn fund-infusion proposal for Air India

Airline told to transfer non-core assets, subsidiaries to special purpose vehicle

The has turned down Rs 300-billion fund-infusion proposal for in the absence of a clear turnaround plan. The had sought the package to wipe out the debt obligation of the state-owned airline, defaulting on salary disbursements and payments to vendors.

The has instead asked the airline to transfer its non-core assets and subsidiaries to a special purpose vehicle (SPV). Those assets would be monetised to reduce the company’s unsustainable portion of the debt. Of the Rs 500-billion total debt, around Rs 220 billion has been termed unsustainable, implying it cannot be serviced with the cash flow income.

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Company

 

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