Thaindian News

New Delhi, Oct 28 (IANS) A Group of Ministers (GoM) led by Finance Minister Pranab Mukherjee Friday asked the Reserve Bank of India (RBI) to vet the turnaround plan of debt-ridden Air India and referred the issue of equity infusion and plane purchase to the cabinet.

The GoM was supposed to take a call on fund infusion of Rs.6,600 crore into the airline and purchase of 27 new Boeing 787 Dreamliner aircraft — both of which, the management claims, are crucial for getting the carrier back into profitability.

“The report by group of officers (GoF) on the turnaround plan (TAP) was discussed today at the GoM. The report and the observations by the GoF would be sent to the RBI for further referral,” Civil Aviation Minister Vayalar Ravi told reporters here after the GoM meeting.

According to Ravi, the RBI will look into the report and observations given by the GoF in one week and then the RBI will send its suggestions to the GoM.

“In one week’s time, the RBI will send its recommendation on the report back to the GoM,” Ravi said.

The GoM was formed to look into the airline’s turnaround and financial restructuring plan, which was drafted by global consulting firms Deloitte and the financial advisory arm of State Bank of India — SBI Caps.

The plan recommended an equity infusion, conversion of short-term loans into long-term debt and hiving off the technical and ground handling division of the airline.

“The issue of further equity infusion now has been referred to the cabinet. The purchase of 787 will also be looked by the cabinet. Both the issues have been referred to the cabinet and it will take the final decision on them.”

According to official figures, Air India’s cumulative losses amounted to Rs.22,165 crore apart from a Rs.22,000 crore debt burden to buy new aircraft. The debt-ridden carrier has to pay almost Rs.3,200 crore as interest to its lenders.