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Debt-laden Air India gets Rs 1,500-cr loan from Bank of India

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Air India, Bank of India, Domestic carrier, Bank loan, Business news

New Delhi: Debt-laden Air India has received a loan worth of Rs 1,500 crore from Bank of India to meet urgent working capital needs less than a month after floating a tender in this regard, an airline source said.

For the second time in recent months, the flagship carrier has received loans from a public sector lender.

 

 

Battling multiple headwinds, the disinvestment-bound airline has been working on ways to reduce its debt, including by way of selling non-core assets and expanding operations.

The source said the airline has received Rs 1,500 crore loan from Bank of India after the tender for the amount was floated last month in order to meet “urgent” working capital needs.

A query sent to Bank of India remained unanswered.

 

 

A tender was issued by the carrier on October 18 in which it had sought government guarantee-backed short-term loans totalling up to Rs 1,500 crore to meet “its urgent working capital requirements”.

Prior to that, the airline had borrowed around Rs 3,250 crore as short tenure loans from two lenders-IndusInd Bank and Punjab National Bank, sources had said. This loan too was for meeting urgent working capital needs and the tender was floated in September.

 

Bank of India gives loan of Rs 1,500-cr loan to debt-laden Air India:

 

In the last nearly three months, at least two public sector lenders-Bank of India and Punjab National Bank-have provided loans to the airline.

 

 

As part of efforts to revive the ailing carrier, which has a debt burden of more than Rs 50,000 crore, the government is in the process of finalising the contours of its strategic disinvestment.

Air India is surviving on taxpayers’ money under the bailout package extended by the previous UPA government in 2012.

 

 

As part of the turnaround plan, the national carrier is to receive up to Rs 30,231 crore from the government over a ten-year period subject to meeting certain performance thresholds.

The Air India group flies to 44 overseas and 75 domestic destinations. There are flights to Copenhagen, Tokyo, Washington, Stockholm, Sydney, Hong Kong, Kabul, Colombo, Seoul, Singapore and London, among other foreign cities.

 

Automobile

Car manufacturer Maruti Suzuki is giving heavy discounts on its automobiles: See here

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Maruti Suzuki is India’s largest carmaker. The brand sells the highest number of cars in the Indian market. Adding to the same point is the fact that the top five best selling cars last month were Maruti Suzuki vehicles. This though is no fail proof plan that each month the cars will continue selling no matter what. To this very effect, Maruti Suzuki dealerships are offering discounts on their cars. Each and every model in the Maruti Suzuki Arena dealership gets a discount. For example, the least priced offering from the manufacturer, the Maruti Suzuki Alto gets a cash discount of Rs 15,000 whereas if one were to exchange their old car then an additional Rs 15,000 off will be provided. On the Celerio X, a few dealers are willing to give up to Rs 10,000 cash discount whereas on the Celerio, the offer is for Rs 15,000. However the Rs 15,000 is only available as exchange bonus.

Also Read Maruti Suzuki S-Presso review

On the Maruti Suzuki S-Presso, the cash discount is for Rs 12,000 and on the WagonR, it is for Rs 10,000. It may be noted that the CNG versions of these cars do not come with any discounts. On the base Maruti Suzuki Swift Lxi version and the Lxi (O), customers will get up to Rs 30,000 discount. Those dealers who have the pre-facelift model are willing to add an additional Rs 5,000 as part of the discounts. If one opts for the Vxi and above trims of the new model, then Rs 10,000 cash discount is being given.

On the Maruti Suzuki Dzire, customers stand to get no discounts on the top trims. On the base versions, Rs 5,000 discount is being offered. Same is the case with the Maruti Vitara Brezza but here the higher variants get Rs 10,000 off. There are no discounts on the Maruti Suzuki Ertiga. Depending on the model, customers might end up getting exchange bonus varying from Rs 10,000-20,000. Add Rs 5,000 corporate discount to the mix as well.

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