Air India to get Rs.6,500 crore of fresh equity

New Delhi, July 10 (IANS) Finance Minister Arun Jaitley Thursday proposed infusion of an additional equity of Rs.6,500 crore in the cash-strapped national passenger carrier Air India for the current fiscal.

"Budgetary support of Rs.6,500.00 crore has been earmarked for equity infusion in Air India Limited," said the expenditure budget document.

The national passenger carrier, which has an accumulated debt of around Rs.40,000 crore and losses estimated to be around Rs.6,000 crore for 2013-14, was given Rs.5,000 crore in the previous budget.

The budgetary support is a part of a turnaround and a financial restructuring plan worth Rs.30,000 which was passed in April, 2012.

The turnaround plan worth Rs.30,000 crore of equity infusion is expected to be completed over a period nine-years starting 2012-13.

Apart from Rs.30,000 crore of equity infusion, the turn around plan envisions Air India getting Rs.7,400 crore by issuing government-backed non-convertible debentures (NCDs) to its lenders, like financial institutions, banks, LIC and EPFO.

Its operational performance is also expected to improve with the induction of 27 Boeing 787 Dreamliners and a reduced expenditure burden as it hives off its MRO (Maintenance, Repair and Overhaul) and engineering services as two wholly-owned subsidiaries.

Earlier the airline reported to have turned EBITDA (Earnings Before Interest, Depreciation, Tax and Amortization) positive by the tune of Rs 48.75 crore between April and December 2012.