The government has allocated Rs 1,300 crore to service Air India’s debt that has been transferred to a special purpose vehicle called Air India Asset Holding Limited (AIAHL) in the Budget announced today.
The allocations for the next fiscal has also been doubled to Rs 2,600 crore, which will used to service the debt of Rs 29,000 crore that the SPV has taken over from Air India.
As part of the plan to improve the financial position of Air India, the government had announced to transfer about Rs 29,000 crore of the national carrier’s debt into this SPV. This transfer will reduce the interest servicing liabilities of Air India by Rs 2,700 crore, which will be borne by the SPV.
The SPV will also take the assets of Air India, which will be monetised to reduce the loan of Rs 29,000 crore.
The Centre is also discussing issuing Non-Convertible Debentures (NCD) of up to Rs 29,000 crore to repay Air India’s outstanding working-capital loans that have been taken over by the SPV.
