The board of state run Air India has approved a proposal t issue preferential shares worth Rs 7,500 crore to the lenders.

The airline has seen a significant increase in yields and passenger revenue and could issue the preference shares. Its yield went up by 10% in November and the passenger revenues increased by 12.3% in the month.

A Company spokesperson said that the board, "approved the rearrangement of authorized share capital by issue of preference shares worth Rs 7,500 crore, which are proposed to be allotted to the lenders of the working capital as part of the Financial Restructuring Plan."

The spokesperson also said that a cabinet note is being moved by the Civil Aviation Ministry for releasing more equity infusion into the airline and to approve the restructuring plan.

The board was briefed on the implementation of the Financial Restructuring Plan for the national carrier. The State Bank of India , which is leading the consortium of lenders of the airlines, has approached the Reserve Bank of India for clarification on nroms. Air India is asking for an expansion in provisioning norms so as to spread the provision over five financial years.