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Bailout package for Vayudoot on the cards

By Our Special Correspondent

NEW DELHI JULY 13. Yet another bail-out of a public sector enterprise is in the offing.

The Central Government is soon to consider a proposal to write off nearly Rs.180 crores, which was the loss accumulated by the Vayudoot, the failed feeder airline which was merged into Indian Airlines in 1993.

Though the feeder airline ceased to exist, its new owner Indian Airlines was provided a breather in the form of a five-year moratorium on repayment of dues owed by Vayudoot and then clearing them in 10 annual instalments.ut on the expiry of the five-year period, another freeze of two years was granted to Indian Airlines, which too expired in 2000. The creditors have now started pressing the airlines for repayment and one of them, the Bank of India, has already taken the matter to the court.Consequently, the Civil Aviation Ministry has moved the Union Cabinet for a bail-out package and also for retrospective approval of another extension of the moratorium till December this year.

At the time of the merger, Vayudoot had total liabilities of Rs.185.91 crores while the book value of its assets was only Rs.14.71 crores.

One of the proposals before the Cabinet is to write-off dues amounting to Rs.178.78 crores out of a total of Rs.185.91 crores and advise Indian Airlines to discharge the balance Rs.7.13 crores towards banks and others. Alternatively, the Cabinet has been asked to approve writing off Rs.109.45 crores which are owed to the Ministry of Civil Aviation, the Finance Ministry, Indian Airlines and Air-India. Secondly, the Civil Aviation Ministry be authorised to negotiate with the creditors to pay a percentage of dues without any interest of penal interest or foreign exchange variation in full and final settlement of the dues.Third, a one-time budgetary support of Rs.100 crores has been sought for Indian Airlines to discharge the liabilities on account of the proposed one-time settlement.

While the Cabinet has to take a final decision on this, the Ministry is inclined to accept the first proposal of writing off Rs.178.78 crores.

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