This is the second time in over a month that the carrier has floated tenders for short tenure loans even as the government is working on the modalities for the stake sale.
The Maharaja, which is...
surviving on taxpayers’ money, is battling multiple headwinds, including financial woes and stiff competition.
In a document, Air India has said that it is looking for “government guarantee backed short term loans totalling up to Rs 1,500 crore to meet its urgent working capital requirements“.
The loan would have a tenure up to June 27, 2018 from the date of being availed and the deadline could be extended.
“The amount of Rs 1,500 crore will be drawn in one -three tranches... The Government of India guarantee, is valid up to June 27, 2018 or till the date of disinvestment. Air India would like to draw the short term loan within three working days after awarding the acceptance letter to the successful bank/s,” the document has said.
With regard to the loan, the carrier has requested banks to submit their financial bids along with the amount they are willing to provide by October 26.
The airline has last month sought proposals for short—term loans of up to Rs 3,250 crore to meet urgent working capital requirements.
On 28 June, the Cabinet Committee on Economic Affairs (CCEA) had given in-principle approval for strategic disinvestment of Air India and five of its subsidiaries. The government has already invited applications for engaging up to two advisers, a legal adviser and asset valuer for the strategic disinvestment of Air India and its subsidiaries/ joint venture.As part of a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. and it has so far received around ₹ 26,000 crore under the package.
The 10 year bailout package began from 2012.
In June this year, the Cabinet Committee on Economic Affairs (CCEA) gave its in-principle nod to the strategic disinvestment of the airline - which has a debt burden of more than Rs 50,000 crore.
A ministerial group is now working on the disinvestment modalities, including treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit—making subsidiaries.
Meanwhile, Air India unions are likely to meet next week in New Delhi to discuss their strategy amid the government going ahead with the disinvestment process.
Air India, which has over 20,000 employees on its roll, has as many as six recognised unions, representing ground and commercial staff, pilots, cabin crew and engineers, among others, besides, several unrecognised unions.
Significantly, seven Air India unions have already expressed their opposition to the airline’s privatisation.