A proposal for financial restructuring of Air India would come up for discussion at a meeting of a Group of Ministers (GoM) next week, with the national carrier also likely to seek government nod for fleet expansion plan till 2020.
The restructuring plan would also include a proposal for converting its high interest debt to low interest ones and the issuance of a letter of comfort for its lenders - banks and financial institutions, official sources said here.
The restructuring and turnaround plans, vetted by a Committee of Secretaries, would be placed before the GoM.
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The letter of comfort is likely to be issued to ensure that banks and FIIs do not classify Air India’s loans as non-performing assets.
Air India Board, which met in August, has decided to go ahead with the acquisition of Boeing 787 Dreamliner aircraft as part of a fleet acquisition programme till 2020 and would be seeking government nod for it, the sources said.
A proposal for equity infusion of Rs. 6,600 crore for the ailing carrier has already been mooted by the Civil Aviation Ministry to enable the airline clear its massive dues. The government has already infused equity worth Rs. 2,000 crore in the last two financial years.
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The debt-ridden carrier has outstanding loans and dues of Rs. 67,520 crore, of which Rs. 21,200 is working capital loan, Rs. 22,000 crore is long-term loan on fleet acquisition, Rs. 4,600 is vendor dues and an accumulated loss of Rs. 20,320 crore, latest official figures show.