State-run Air India, which has failed to pay salaries to its over 10 billion employees on time for the third month in a row, has sought proposals for short-term loans worth Rs 10 billion to meet "urgent" working capital requirements.
The Rs 10 billion loan will be drawn in June in one or more tranches, according to the bid document. The airline has requested banks to submit their financial bids by June 13, as per the document.
"Air India is inviting bids for short-term loans (STL) totalling to Rs 10 billion to meet its urgent working capital requirement," the bid document said.
The tenure of the loan will be one year (renewable) from the date of availing STL, it said.
Amid fund crunch, during which Air India also had to defer its staff salaries, the airline borrowed Rs 62.50 billion from various banks between September last year and January this year for working capital requirements and other needs.
The debt-ridden Air India, in which government's attempt to sell 76 per cent stake came a cropper last month after it did not get even a single bidder, has not paid salaries for the month of May and a spokesperson had said yesterday that the salaries are expected to be disbursed by next week.
This is the third time since March when the airline has delayed the payment in this year.
The government, which had approved strategic disinvestment for Air India in last June, had on May 31 this year said no initial bids were received for the proposed stake sale.
A senior Air India official had last week that the airline has sought restoration of the equity infusion by the government in the carrier.
The loss-making airline has already received more than Rs 260 billion under the bailout package announced by the former UPA government in April 2012.
The UPA government had approved a turnaround plan under which Air India is to receive a total equity infusion worth Rs 302 billion up to 2021, subject to meeting certain performance thresholds.
The carrier, which has a debt burden of about Rs 500 billion till March last year, had been receiving about Rs 3,000-4,000 crore equity infusion on an average per fiscal from the government till FY14. However, after that the amount was gradually reduced.
For 2018-19, the airline has been allocated Rs 650 crore.