The funds raised through these means will be used to pay interest on loans taken by AI to purchase aircraft in the past.

The board of directors approved a private placement of bonds with a five-year tenor with bullet payment at the end of the maturity period. The target size of the private placement will be Rs 50 crore which is to be enhanced to Rs 100 crore on best effort basis.

The board approved the securitisation of the company's receivables of up to $200 million in the USA with a seven-year tenor and an average life of five years.

It also gave a nod to a wrap-around loan facility of $78 million, a unique finance structure which is being developed.

Air India had been exploring alternative means of raising finance in view of its difficult financial position.

AIrecorded losses of over Rs 290 crore in 1998-98. Most of the company's costs relate to interest payments on loans for purchase of aircraft or for meeting the day-to-day working capital needs of the airline.

Air India is expecting a bail-out financial package from the government. The airline has asked for a financial assistance of Rs 1,000 crore from the government. However, the details of the financial package are yet to be finalised.