The Centre has sought Parliament’s nod for an additional equity infusion of ₹2,345 crore for debt-laden Air India (AI) and a separate sum of ₹1,300 crore for a special purpose vehicle (SPV) which houses the national carrier’s debt and non-core assets.
Special purpose vehicle
The SPV, Air India Assets Holding, comprises ₹29,000 crore of the ₹55,000 crore debt of AI and the airline’s non-core assets such as the ground-handling arm and land. The purpose is to liquidate the assets and pay off the debt parked in the SPV.
The government had earlier provided an interim support of ₹980 crore as equity by way of supplementary grants in September. This was in addition to the ₹650 crore set aside for the ailing carrier during the Budget announcement.
It had already provided sovereign guarantee to enable Air India to raise ₹2,000 crore from banks, which the airline has availed.
The airline had also raised ₹1,000 crore from the National Small Savings Fund.
The government’s effort to divest its stake in the loss-making airline earlier this year met with a failure. It maintains that it will revisit the process once macroeconomic conditions turn favourable.
