Cabinet note on AI equity infusion soon

The government is considering writing off Rs 4,500 crore cash loss of Air India and infusing additional equity of Rs 6,750 crore over a 10-year period, as lenders of the beleaguered carrier tonight broadly approved its debt recast plan.

With the go-ahead from the lenders, Civil Aviation Ministry would in the "next few days" start preparing a note for the Cabinet on both counts, official sources said.

At a two-hour meeting with officials of the Civil Aviation Ministry and the national carrier, representatives of a consortium of 14 banks led by SBI approved the debt recast plan, which had got the green signal from the Reserve Bank of India (RBI) last week, the sources said.

This crucial meeting came a day ahead of the meeting of the Air India board here.

The total debt of Air India, consisting of aircraft loans and working capital loans aggregate Rs 43,777.01 crore. The working capital loan is Rs 21,511.10 crore while the aircraft loan is Rs 21,412.06 crore, latest figures show.

The approval of the debt restructuring plan would ease the massive debt servicing burden of the troubled airline. The RBI had last Thursday approved the extension of its loan tenures from 10 to 15 years.

The bank representatives are understood to have sought clarifications on certain regulatory issues from the RBI, the sources said, adding that they wanted to become part of a proposed committee to be set up to monitor the implementation of Air India's overall turnaround plan.