Air India gets ~1,500-crore loan from Bank Of India
Debt-laden Air India has received a loan worth of ~1,500 crore from Bank of India (BOI) to meet urgent working capital needs in less than a month after floating a tender in this regard, an airline source said.
For the second time in recent months, the flagship carrier has received loans from a public sector lender. Battling multiple headwinds, the disinvestment-bound airline has been working on ways to reduce its debt, which includes ways of selling its non-core assets and expanding the operations.
The source said that the airline has received a ~1,500-crore loan from BOI after the tender for the amount was floated last month in order to meet “urgent” working capital needs. A query sent to BOI remained unanswered. A tender was issued by the carrier on October 18 in which it had sought government guarantee-backed short-term loans totalling up to ~1,500 crore to meet “its urgent working capital requirements”.
Prior to that, the airline had borrowed around ~3,250 crore as short-tenure loans from two lenders — IndusInd Bank and Punjab National Bank, sources said. This loan too was for meeting urgent working capital needs and the tender was floated in September.
In the past three months, at least two public sector lenders— BOI and Punjab National Bank— have provided loans to the airline. As part of efforts to revive the ailing carrier, which has a debt burden of more than ~50,000 crore, the government is in the process of finalising the contours of its strategic disinvestment. Air India is surviving on taxpayers’ money under the bailout package extended by the previous UPA government in 2012. As part of the turnaround plan, the national carrier is to receive up to ~30,231 crore from the government over a 10-year period. The Air India group flies to 44 overseas and 75 domestic destinations. There are flights to Copenhagen, Tokyo, Washington, Stockholm, Sydney, Hong Kong, Kabul, Colombo, Seoul, Singapore and London, among other foreign cities.
Air India had borrowed around ~3,250 cr as shorttenure loans from IndusInd Bank & Punjab National Bank