Air India Receives Rs 1,000 Crore From National Small Savings Fund

Cash-strapped Air India raised Rs 1,000 crore from the National Small Savings Fund and expects to mop up Rs 500 crore through short-term borrowings next week, an airline source said.

The ailing national carrier would use the funds to mainly meet its working capital requirements. The fresh funds are in addition to the Rs 980 crore received towards equity infusion by way of supplementary grants from the central government in September.

“We have received Rs 1,000 crore by way of loan from the National Small Savings Fund last week. This loan has been availed at a lower interest rate. However, we have to repay the loan amount by March next year,” the official said.

In early September, the carrier sought bids for garnering Rs 500 crore through short-term borrowings to meet its working capital requirements. The carrier had fixed Sept. 10 as the deadline for submission of bids.

However, the deadline was extended to Oct. 31 after it failed to get any response. “We are hopeful of raising another Rs 500 crore when we open the bids next week,” the source said.

Air India, which is sitting on a debt pile of more than Rs 50,000 crore, has been struggling to raise money since last year. The airline had also defaulted on salaries besides delay in payments to oil companies, engine makers and aircraft lessors.

In June also, Air India borrowed short-term loans worth Rs 1,000 crore to pay staff salaries and meet other obligations, following a failed privatisation attempt.

The airline raised Rs 6,250 crore from various banks between September and March last fiscal. The carrier is staying afloat on a bailout package extended by the government in 2012, as part of a turnaround plan and a financial restructuring plan.