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Air India may not be able to service working capital loans without equity infusion: reports

14-Jul-2011 10:18 AM

Air India reportedly plans to raise INR37.9 billion (USD851 million) to partly fund the purchase of 27 B787s (Live Mint, 13-Jul-2011). However, the carrier, on 12-Jul-2011, reportedly told the Indian Finance Ministry that the airline may not be able to service working capital loans from Indian banks if it does not receive an immediate equity infusion of INR66 billion (USD1.5 billion) from the government. If the carrier fails to make payments before 31-Jul-2011, the loans will reportedly turn bad, as no payments have been made in the past two months. Without the equity infusion, the cost of borrowing increase for the proposed USD850 million debt-raising plan.