Also the allocations have been doubled to Rs 2,600 crore for the next fiscal to be used to service the debt of Rs 29,000 crore
New Delhi: In order to service Air India’s debt that has been transferred to a special purpose vehicle (SPV) called Air India Asset Holding Limited (AIAHL) set up by the civil aviation ministry, the government has allocated Rs 1,300 crore in the interim budget announced on Friday. Additionally, the allocations have been doubled to Rs 2,600 crore for the next fiscal to be used to service the debt of Rs 29,000 crore that the SPV has taken over from the debt-laden carrier.
A total Rs 3,900 crore allocation
Combing the allocations for both the fiscals, it would be a Rs 3,900 crore allocation for the special purpose vehicle, which has been created as part of the financial restructuring of debt-laden Air India.
The government had planned to transfer around Rs 29,000 crore of Air India’s debt into the SPV, according to the plan to boost the financial position of the carrier. The transfer is set to bring down Air India’s interest servicing liabilities by Rs 2,700 crore, which will be borne by the SPV.
Trying to keep the maharaja flying
The SPV will also take Air India’s assets, which will be monetised to cut the Rs 29,000 crore loan. The Centre is also in talks to issue Non-Convertible Debentures (NCD) of about Rs 29,000 crore to repay the carrier’s outstanding working-capital loans that have been taken over by the SPV.