New Delhi: One of the primary concerns associated with the strategic disinvestment of flag-carrier Air India Ltd – the state-owned carrier’s Rs 48,000-crore debt – may be taken off the taxpayer’s plate as the Centre plans to bundle the liability as part of the sale of the airline, a senior government official told The Indian Express. As of March 31, 2017, Air India had aircraft loans of Rs 17,360 crore, along with working capital loans of Rs 31,517 crore. However, along with Air India, two of its subsidiaries – low-cost carrier Air India Express and ground-handling firm AI-SATS – which are profit-making entities, will be offered in a package along with the national carrier.
“If there is so much debt…naturally, if I am selling a machine, the debt of the machine will also go with it. How can the debt be kept away? Strategic sale should not be seen as a method of realisation of money. The concept is that the true economic wealth of the company is not being exploited. The potential, the rights, all the brownfield project can be expanded with very little effort,” said the official, who is a part of the airline’s disinvestment process.
On Friday, Minister of State for Civil Aviation Jayant Sinha told reporters that the government expects to have the winning bidder for Air India by the end of June and the “legal closing” of the transaction would be done by year-end.
The government has appointed consultancy firm EY as the transaction advisor for Air India’s strategic sale. The minister also said that Air India would be offered to potential buyers as four different entities – Air India, its low-cost arm Air India Express and subsidiary AI-SATS would be one entity, while regional airline Alliance Air would be a separate entity. Apart from these, Air India Air Transport Services Ltd (AIATSL) and Air India Engineering Services Ltd (AIESL) would be sold separately, he added.
03/02/18 Sandeep Singh, Pranav Mukul/Outlook
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“If there is so much debt…naturally, if I am selling a machine, the debt of the machine will also go with it. How can the debt be kept away? Strategic sale should not be seen as a method of realisation of money. The concept is that the true economic wealth of the company is not being exploited. The potential, the rights, all the brownfield project can be expanded with very little effort,” said the official, who is a part of the airline’s disinvestment process.
On Friday, Minister of State for Civil Aviation Jayant Sinha told reporters that the government expects to have the winning bidder for Air India by the end of June and the “legal closing” of the transaction would be done by year-end.
The government has appointed consultancy firm EY as the transaction advisor for Air India’s strategic sale. The minister also said that Air India would be offered to potential buyers as four different entities – Air India, its low-cost arm Air India Express and subsidiary AI-SATS would be one entity, while regional airline Alliance Air would be a separate entity. Apart from these, Air India Air Transport Services Ltd (AIATSL) and Air India Engineering Services Ltd (AIESL) would be sold separately, he added.
03/02/18 Sandeep Singh, Pranav Mukul/Outlook
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