Thursday, October 25, 2018

Air India Mumbai building sale hits hurdle of a reluctant board

New Delhi: Union shipping minister Nitin Gadkari's proposal of selling Air India's iconic building in Mumbai to the Jawahar Lal Nehru Port Trust (JNPT) has hit turbulence as the national carrier’s board is reluctant to sell the building, which is ostensibly its ‘cash cow’.

Besides, the sale would not have yielded much cash flow for the company since the building is mortgaged to State Bank of India.

It is also felt that under the current market conditions, the building is unlikely to garner the kind of funds expected from a prime real estate at Nariman Point.

According to an official in the know, “It is a steady cash flow stream for the company and also the current evaluation would not even fetch Rs 10 billion for the Nariman Point building to Air India. The building has been mortgaged to the State Bank of India and if it is sold, the state-owned lender would get its due first and the remaining amount would go to Air India.”
24/10/18 Megha Manchanda & Arindam Majumder/Business Standard
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