The Air India of Banking, State Bank of India, has recently sanctioned loan to Air India worth over ₹1500 crore to meet the working capital requirements of the firm. Air India is already saddled with the loan worth ₹50,000 crore however, SBI has still approved Air India’s loan!
Scouting for funds, Air India is in advanced discussions with public sector lender SBI for sale of at least two residential properties that could net nearly Rs 50 crore, airline and banking sources said.
The loss-making airline continues to work on the strategy to divest non-core assets while the government moves ahead with the process of strategic stake sale.
The sale of two residential assets by Air India is expected to fetch them ₹46 crore. The regular attempts to sell these assets by Air India has only been able to fetch SBI ₹90 Crore.
The company now lacks enough working capital to meet their daily expenditure requirements and immediately looked for funds to manage their daily requirements effectively.
The loss-making venture was also planning to buy 3 Boeing aircrafts earlier this month seeking for an additional capital requirement of $535 Million.
As per the financial reconstruction plan approved by the Cabinet Committee on Economic Affairs in 2012, Air India is required to monetise its assets and generate ₹5000 Crore by the way of sale, leasing, or developing an asset as a joint venture. Under this plan, the carrier had to get financial assistance to the tune of ₹30,000 Crore over the period of 10 years.
Air India is highly geared business and in spite of that AI now looked for short-term loans in order to meet the liquidity. Air India doesn’t seem to recover from this stage with government intervention in this stage as it has sunk deep down in liabilities!