New
Delhi: The finance ministrys decision to hold back unconditional government
guarantee for Air Indias Rs 7,400 crore bond issue may push up the national
carriers restructuring plan beyond the Rs 30,000 crore cleared by the Cabinet
six months ago.
Sources said that even civil aviation minister Ajit Singhs fervent pitch for a guarantee sans any conditions with finance minister P Chidambaram has failed to move North Block.They said that after the meeting,Singh told his officers that the finance ministry had agreed to his plea but there has been little movement beyond that.
Already,the bond issue,meant to be subscribed by longterm investors such as Life Insurance Corporation and the Employees Provident Fund Organization,has been deferred and with only a conditional cover in hand,the Air India management is yet to fix a fresh date.
On September 24,TOI was the first to report that the conditional guarantee will only be available if the airline meets the specified parameters.Bankers as well as the A-I management have questioned the rationale for a virtually unprecedented move saying that if the parameters are met,the airlines financial health would be sound and in that situation the chances of a default are minimal.
An Air India executive,who did not wish to be identified,said that the national carriers cost of servicing debt remained high as it was unable to complete the plan to replace loans that were taken at a high cost.
Sources said that even civil aviation minister Ajit Singhs fervent pitch for a guarantee sans any conditions with finance minister P Chidambaram has failed to move North Block.They said that after the meeting,Singh told his officers that the finance ministry had agreed to his plea but there has been little movement beyond that.
Already,the bond issue,meant to be subscribed by longterm investors such as Life Insurance Corporation and the Employees Provident Fund Organization,has been deferred and with only a conditional cover in hand,the Air India management is yet to fix a fresh date.
On September 24,TOI was the first to report that the conditional guarantee will only be available if the airline meets the specified parameters.Bankers as well as the A-I management have questioned the rationale for a virtually unprecedented move saying that if the parameters are met,the airlines financial health would be sound and in that situation the chances of a default are minimal.
An Air India executive,who did not wish to be identified,said that the national carriers cost of servicing debt remained high as it was unable to complete the plan to replace loans that were taken at a high cost.
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