NEW DELHI : Air India is planning to seek approval from the finance ministry for raising 100 bln rupees yet again through tax-free bonds on the lines of infrastructure companies like India Infrastructure Finance Co and Indian Railway Finance Corp, a company official said.
The finance ministry had earlier rejected the national carrier’s proposal to raise 100 bln rupees through tax-free bonds on the grounds that such issues were permitted only for infrastructure companies. “We are working on the proposal again. We would like to raise 10,000 crore rupees (100 bln rupees) via tax-free bonds guaranteed by the government. We would use the proceeds of the issue to clear our loan book,” the official told Cogencis.
The proposal to issue tax-free bonds worth 100 bln rupees is one of the 46 recommendations suggested by the airline’s cost cutting committee headed by R.H. Dholakia.
The airline has a loan book of around 440 bln rupees, of which it has already restructured 180 bln rupees of debt through issuance of non-convertible debentures worth 74 bln rupees to its lenders. -Cogencis