Friday, June 02, 2017

Govt advisor: Air India privatisation very difficult without debt write-off

New Delhi: Privatising state-owned airline, Air India will be “very difficult” unless the government writes off at least part of its debts, a senior government economic adviser said on Friday after a top policy panel recommended selling off the carrier.

Loss-making Air India, which bailed out in 2012 with $5.8 billion of federal funding, has troubled the government ever since the botched merger between two state carriers in 2007 and the rise of private airlines slashed its market share.

Niti Aayog, the government's top policy think-tank headed by Prime Minister Narendra Modi, recently submitted a report recommending a stake sale in the airline, a move Finance Minister Arun Jaitley welcomed.

Arvind Panagariya, deputy head of the think-tank, said the government needed to decide whether it would write off all or part of Air India's 520 billion rupees ($8 billion) in debts.

“Selling it with the current existing debt is going to be very, very difficult even if the sale is open to both domestic and foreign buyers. So, something will need to be done on the debt issue,” he told reporters in New Delhi.
02/06/17 Reuters/Business Line