Tuesday, October 03, 2017

Govt likely to transfer all debt and assets of Air India into SPV

New Delhi: The government has decided to move the huge debt of the national carrier Air India into a special purpose vehicle (SPV) before selling the carrier, according to a report in the Economic Times.
Air India has a total debt of Rs 52,000 crore and about Rs 33,000 crore working capital loans.
The decision was taken by the panel formed for the Air India's divestment on August 30. The committee was headed by the Finance Minister Arun Jaitley.
"The committee decided to transfer all debt and assets of Air India to an SPV that will be managed by the government. The airline will be sold only with aircraft debt on its books. This will make the airline a much more lucrative proposition," one of the officials told ET.
Earlier this month, banking majors Punjab National Bank and IndusInd Bank have won the bid to provide national passenger carrier Air India with over Rs 3,000 crore government guarantee backed "Short Term Loans" (STLs).
Earlier, ET had reported on September 18, that the seller of Air India will be the government and not the national carrier.
"Either the government decides to sell the company with debt, which would not fetch any money, or the government sells it without the debt — that would fetch money," the official was quoted as saying.
The government has allowed airlines with up to 49% foreign partnership to bid for Air India.
Currently, IndiGo is the only carrier that has officially shown interest in buying Air India.  The airline has indicated that it will not hesitate from buying new planes to expand its international footprint.
02/10/17 Times Now
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