Air India (AI) has reportedly put out a requirement for Rs 1,500 crore in short-term loans, even as the Central government looks to divest the national carrier that has so far stayed afloat on taxpayers' money.
The fresh requirement is the second time AI has called for a short-term loan in little over a month in order to meet its "urgent" working capital needs.
The previous instance was in September when the carrier had been looking for Rs 3,250 crore in short-term loans.
Details of current loan sought
AI has, in a document released on October 18, asked banks to respond to its call for the short-term loan with financial bids by October 26.
A PTI report quoted the carrier as saying in the document that it was seeking "government guarantee-backed Indian Rupee short-term loans totalling up to Rs 1,500 crore to meet its urgent working capital requirements."
The document added: "The amount of Rs 1,500 crore will be drawn in one to three tranches... The Government of India guarantee is valid up to June 27, 2018, or till the date of disinvestment."
It added: "Air India would like to draw the short-term loan within three working days after awarding the acceptance letter to the successful bank/s."
Ailing airline
These two loans — totalling Rs 4,750 crore — will add to the debt burden of Air India, which already stands at around Rs 50,000 crore.
The airline, which faces tough competition in both the Indian and international markets, was to receive a 10-year bailout package — approved by the UPA regime — of Rs 30,321 crore.
AI has already received Rs 26,000 crore of the package, starting from 2012, and yet there has been not much of a sign of a turnaround.
That was the reason the Cabinet Committee on Economic Affairs had earlier this year approved of strategic divestment in AI.
The modalities of this divestment are still being worked out, even as the Tata Group — which already runs the airline Vistara — has already expressed interest in taking up stakes in Air India.
