Post-merger AI-IA networth: Rs 2,557 cr

New Delhi: The net worth of Air India and Indian Airlines after their upcoming merger is expected to be Rs 2,557.49 crore, 14 times their current combined net worth of Rs 185.29 crore. This is according to merger consultant Accenture. Other financial parameters like assets are also expected to increase significantly since they will now be valued at market rates, giving the merged entity, National Aviation Company, a balance sheet in black when it floats an IPO next year.
In 2005-06, Air India had a net worth of Rs 403.27 crore, while Indian Airlines has a negative net worth of Rs 217.98 crore. “The synergy benefits of the merger will help the new entity get the right price,” a government source close to the merger told FE. But for financial year 2006-07, balance sheets of both the carriers remain in the red due to losses.
The value of assets is also expected to jump significantly. At present, the combined asset value of the two carriers stands at Rs 4,804 crore, comprising AI’s assets of Rs 4687.08 crore and Indian Airlines’s Rs 117.02 crore. Post-merger, it is likely to increase to one-and-a-half times to Rs 7,176.30 crore. “With all the synergies and all the assets we have, some people even say that it is a conservative estimate and could be much more,” Indian Airlines CMD Vishwapati Trivedi said.
30/05/07 Sunny Verma & Atreyee Dev Roy/Financial Express

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Categories: Air India May 2007, Indian May 2007