Air India has warned the Prime Minister’s workplace (PMO) and also the finance ministry that the country’s sovereign rating could also be hit because the airline is on the brink of defaulting on interest payments on foreign loans of Rs fifteen,000 crore. The loans are backed by a government guarantee.
The state-owned airline had taken these loans to part-fund its Rs twenty two,000-crore aircraft acquisition programme. The banks concerned embody Citibank, customary Chartered, Deutsche Bank, J P Morgan and KFW.
In a communication to PMO and also the finance ministry sent many days ago, the Air India management pegged the overdue quantity at Rs four,489 crore, as well as payments to grease corporations, airport operators, vendors and workers, besides interest on operating capital loans.
CASH CRUNCH Overdue position (dues not settled after 120 days) | |
| 1) Oil companies | Rs 2,300 cr |
| 2) Interest on working capital | Rs 374 cr |
| 3) Interest on IDBI aircraft loan | Rs 200 cr |
| 4) Service tax | Rs 123 cr |
| 5) Airport operators | Rs 775 cr |
| 6) Other vendors | Rs 367 cr |
| 7) Wages | Rs 350 cr |
| Total | Rs 4,489 cr |
| Source: Air India | |
It said thanks to the essential liquidity position on account of banks’ refusal to lend (because of non-payment of interest on operating capital loans), the vendors’ dues of over a hundred and twenty days were pending. The vendors were threatening to place the airlines on “credit hold”, which might hit operations, it said. Such an intermission, it said, would result in a fall in revenue, hitting even payments for loans taken to shop for aircraft.
The scenario, it said, had been worsened by the actual fact that the govt had not paid dues of Rs one,173 crore on account of VVIP operations and flights to evacuate Indians from Libya, Egypt and Japan.
Air India said its monthly assortment was Rs one,100 crore, whereas the expenditure was Rs one,700 crore. Out of the operational revenue of Rs twenty two crore daily, Rs 14.50 crore goes to grease corporations, leaving solely Rs seven.5 crore for servicing loans.
At a review meeting many days ago, the Air India management was given steep revenue assortment targets, while not that it'd be in huge bother within the coming back months. it absolutely was told to extend daily revenue from Rs thirty eight crore to Rs sixty five crore (Rs one,950 crore a month) and guarantee forty per cent higher passenger traffic receipts (from Rs thirty crore to Rs forty two crore a day). it absolutely was additionally told to double cargo revenue to Rs five crore daily. Alliance Air, a subsidiary, was asked to earn Rs one crore additional each day.
The management said meeting these targets would facilitate the airline bridge the Rs 600-crore monthly gap between expenditure and revenue, while not that it'd not be ready to build interest payments.
Source:http://www.business-standard.com/india/news/ai-warns-govtloan-default-consequences/440733/
No comments:
Post a Comment