New Delhi: Ahead of the Budget, Air India has approached the Finance Minister to extend guarantee for raising Rs 2,000 crore worth of working capital loans till March 2018, after North Block turned down the ailing national carrier’s proposal for raising tax-free bonds.
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Air India got a sovereign guarantee to raise $300 million through external commercial borrowing this fiscal. The guarantee ends in March 2016.
Sources told Bloomberg TV India that Air India has now written to the Finance Ministry asking for extension of the guarantee till the end of FY18.
The move comes after Finance Ministry has turned down a proposal by Air India to raise Rs 10,000 crore in tax-free bonds to retire its long-term loans citing constraints regarding the government standing as a guarantor for such a bond issue.
Already, the government has been infusing capital in the ailing carrier to help it come out of the woods as part of a Turnaround Plan (TAP) chalked out in 2010.
14/01/16 Veena Mani/Bloomberg TV
