Cabinet to soon decide on Air India funding

Adecision on additional equity infusion in Air India is likely to happen soon withthe Civil Aviation Ministry moving a Cabinet note on the matter, even as theailing carrier planned to conclude a debt recast package with its bankers bymid-March next year.

Confirming the circulation of the note, official sourcessaid the Union Cabinet may take up the issue within the first fortnight of2012.

Speaking on the national carrier's debt recast plans, theysaid the bankers have sought an extension of the provisioning norms over afive-year period.

Maintaining that the lenders have requested for extendingprovisioning norms so that the provision could be spread over extendedfinancial years, Air India officials said the issue "has already beentaken up with Reserve Bank of India and the reply is awaited".

The officials also maintained that Air India had the"full support" of its lenders to conclude this arrangement within 120days of the RBI approval,  that is beforethe middle of March next year.

The airline officials said the Finance Ministry has notrejected the debt recast plans, contrary to reports.