Mumbai: National carrier Air India is looking to raise ₹ 1,000 crore to meet its urgent working capital requirements, according to a statement on the airline’s website.

The tenure of the loan will be for a year and the airline will keep the option to renew the loan, according to the tender document uploaded on Thursday.

“The amount will be drawn on 18 June in one or more tranches," the tender document said.

“Air India reserves the right to repay/refinance the loan during the tenure of the loan without any pre-payment penalty or requiring any notice period," added the document.

The document asks bankers to submit their loan proposals to the airline by 13 June.

Divestment-bound Air India, having failed to attract any bidders, has delayed paying staff salaries for the month of May, payable in June.

An Air India spokesperson said the delay was because of a freeze in the government’s equity infusion after the airline was put on the block for divestment.

“The salaries should be disbursed by next week," the spokesperson said.

The government hopes to sell a 76% stake in Air India, which has a net debt of $7.5 billion. However, the stake sale drew a blank, with the government saying it had not received any bids after the deadline for submitting expressions of interest ended on 31 May. Most investors who had shown interest were wary of what the government’s future role would be as it would retain a 24% stake.

A ministerial panel entrusted with the divestment is expected to decide on the course of action in the weeks ahead.

Aviation consultants CAPA India had, in a 4 June report titled Air India Privatisation Setback, said the government’s continued ownership of Air India would result in an indefinite drain on the exchequer, and the eventual closure of the airline may come at a greater cost to the employees, taxpayers and the economy.

“Since 2012, the government has pumped in $4 billion in Air India, and may have to infuse more, given that it is expected to lose $1.5-2 billion in FY19 and FY20," the report said.

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