New Delhi: State-run Air India hopes to meet its fund requirements by raising loans against the government guarantee for Rs 2,500 crore and run its business smoothly till the sale process concludes.
“We have not decided on further loans from banks. We have the Government of India (GoI) guarantee for Rs 2,500 crore and if needed, we may raise some loans,” said a top Air India official wishing not to be named.
The airline has been put on the block by the government as part of its disinvestment target in FY20. A ministerial panel led by Home Minister Amit Shah is likely to decide the terms of sale in coming weeks.
As the disinvestment process is underway, the airline has been directed to freeze all appointments and hold on promotions. In the wake of the stake sale, fleet expansion is also on hold.
The airline has, however, expanded its network in the last few months, connecting more cities locally and internationally by bringing back its grounded airplanes into operations.
“We have not taken any new plane for adding flights. We are repairing the grounded aircraft and putting them back into operations. We have not incurred any major expenditure on it,” the official quoted above said.
The Shah-led panel had met last week for the first time after their reconstitution but did not take any decision. Civil Aviation Minister Hardeep Singh Puri had said after the first meeting that second meeting will be scheduled shortly to take decisions related to disinvestment.
Among many issues on the meeting agenda of the first meeting was transferring more debt, over and above Rs 29,464 crore decided earlier, to Air India Assets Holdings Ltd (AIAHL) to make the deal attractive for private parties.
The government plan to sell Air India failed last year as no private party showed any interest in buying a majority 76 per cent stake on offer. The prospective buyers stayed away from the bidding finding some of the terms unfavourable.
After failing to find a bidder in its previous term, the Modi 2.0 government is working this time on war-footing to sell Air India to a private player.
Air India is currently surviving on a Rs 30,000 crore bail-out package cleared by the UPA-II government.