Air India seeks to float $1bn tax-free bonds
17 Aug 2009
New Delhi: The civil aviation ministry has sought fresh equity from the government to fund its fleet expansion plans and other expenses as well as approval for Air India to float tax-free bonds worth Rs5,000 crore ($1 billion). Ministry officials said the bonds were necessary for the ailing state-run carrier to meet expenses in the course of the ongoing five year plan ending 2011-12.
Operating on an equity base of Rs145 crore the national carrier is seeking fresh equity infusion to swap high-cost debt and lower its debt burden.
The carrier is currently engaged in a restructuring exercise aimed at keeping it afloat after accumulating losses worth $2 billion.
Officials have clarified that these issues will be considered separately by the cabinet and will not be a part of the Group of Ministers panel set up to look into the issue of high aviation fuel prices.
Air India had placed a massive order for as many as 111 new aircraft with both the US-based Boeing and the European Airbus Industrie.
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