Thursday, June 01, 2017

PM Modi Said To Be Considering Privatising Air India

Prime Minister Narendra Modi is actively considering a proposal to privatise state-run Air India Ltd., possibly asking the buyer to absorb loans of about 200 billion rupees ($3.1 billion) linked to aircraft purchases, a person with direct knowledge of the matter said.

The deliberations follow recommendations by a government panel for the sale of the money-losing carrier that has nearly $8 billion in debt, the person said, asking not to be identified because the discussions are private. As for the rest of the flag carrier's debt, the government has yet to decide whether to write off or reorganize it, the person said.

The process may include disposing of Air India's real-estate and other non-core assets worth about $3 billion before the sale or hiving them off, the person said. Air India spokesman Dhananjay Kumar and a spokesman for PM Modi didn't immediately respond to requests for comments.

Unprofitable for a decade with taxpayers bailing it out in the past six years, Air India's appeal to any investor is contingent on the government's ability to write off the debt not backed by assets. That is a political call PM Modi needs to take at a time when many of the nation's state-run lenders have been seeking capital injection from taxpayer funds amid mounting bad loans.
31/05/17 Unni Krishnan and Anurag Kotoky/Bloomberg/NDTV