Air India has solicited short-term loan proposals worth Rs 1,000 crore to meet urgent working capital needs, PTI reported on Friday. The airline has failed to pay salaries to nearly 11,000 employees in the past three months.
The national carrier invited bids from financial institutions and banks to be submitted by June 13. The Rs 1,000 crore loan will be drawn down in June in one or more tranches, IANS reported citing a tender document released by Air India on Wednesday.
“The duration of the loan will be one year (renewable) from the date of use of the [short-term loans]says the application document, according to the IANS. “The Indian government guarantee is currently valid for one year.
The airline’s decision to apply for the loans comes just a week after the government failed to attract any bids to sell its 76% stake in Air India by the May 31 deadline.
Meanwhile, Civil Aviation Minister Suresh Prabhu said on Thursday that the group of ministers the Center has appointed to manage the Air India divestment process will decide on the future course of action as no initial offer has been announced. has been received for the proposed stake sale, PTI reported.
Prabhu said all the alternatives will be discussed by Air India’s specific alternative mechanism headed by Union Finance Minister Arun Jaitley.
In January, the government decided to sell a 76% stake in Air India, ignoring a parliamentary panel’s recommendation to give the debt-ridden airline five years to revive itself. Air India has not made a profit since its merger with state-owned national operator Indian Airlines in 2007. The company made an operating profit of Rs 298 crore in the last financial year to March 2017 , but still posted a net loss of Rs 5,765.16 crore. .