THE INDIAN Government has rejected Air India's proposal to raise $350 million in loans to pay for the proposed expansion of its long-haul fleet.
Instead, the Indian finance ministry has told the airline to balance its finances by cutting debt and raising new equity. The response has left uncertainty hanging over Air India's programme of borrowing.
The Indian finance ministry had earlier turned down a proposal from Air India to raise a $110 million bridging loan to finance stage payments for the aircraft, due to start delivery in August 1996. That loan would have been repaid once the main financing was in place.
After the finance ministry rejected this proposal, Air India was advised to concentrate on raising the full $350 million itself.
Source: Flight International
