AI directors seek loan moratorium

The newly appointed independent directors on the Air India board,industrialists Anand Mahindra and Harsh Neotia,have sought a moratorium from the government on loan repayments by the national carrier,a senior official told FE. In a crucial meeting with finance minister Pranab Mukherjee on Wednesday,the directors also asked for the writing off of interest over interest besides more equity infusion over and above the Rs 1,200 crore the government has promised to provide this fiscal.

The government had last financial year extended a Rs 800 crore lifeline to the public sector carrier as against a demand of Rs 5,000 crore. The cash-starved national carrier has over Rs 17,000 crore loans on its books. The airline is estimated to have lost Rs 5,400 crore in 2009-10 due to high fuel prices,under-utilisation of resources,excess capacity and predatory pricing in the market. Another official who was also present in the meeting with the finance minister said the independent directors have suggested a complete restructuring of the airline and given two-three alternatives. “The board members have given many suggestions which we are taking into consideration. Air India is on a revival path,” civil aviation minister Praful Patel told reporters after the meeting with finance minister Pranab Mukherjee.

The independent directors who include Ficci secretary general Amit Mitra and Fali Major have asked the airline to use a sovereign guarantee to raise funds and not use the aircraft as security. In a board meeting early in the day,the venue of which shifted all of sudden from the company’s Delhi office at Airlines House to the Ficci building,Ambuja group chairman Harsh Neotia asked the company management to increase its fleet utilisation and bring it on a par with private carriers. FE