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