Thursday, November 30, 2017

Government to halve Air India debt for smooth sale

New Delhi: To ensure smooth sale of debt-laden Air India, the Narendra Modi government plans to reduce the airline’s Rs 60,000-crore debt by half. According to sources privy to the matter, the government will transfer the debt-laden carrier’s non-aviation assets and short-term loans worth Rs 30,000 crore to a separate company.

The firm’s non-aviation assets mainly pertain to real estate from Tokyo to London and two hotels. Shifting of short-term loans to a separate entity would mean the government absorbing the working capital loans of Air India. If the government goes ahead with the proposal, the buyer of Air India would only have to inherit a loan of around Rs 20,000 crore, which was taken to acquire aircraft.

Sources said that the government wants the bidding process to be initiated before March 31, adding that foreign airlines will also be allowed to bid for Air India. So far, Air India has managed to attract only a few prospective buyers and the reason for the poor response has mainly been its huge debt of Rs 60,000 crore.

IndiGo, India’s biggest commercial airline operated by InterGlobe Aviation, had said in June it was willing to buy Air India’s international operations, or even the entire airline business.
30/11/17 Indian Express