Tuesday, November 12, 2019

Government may waive off Air India payables to airports and oil companies before divestment

The government does not want to leave any stone unturned to make the second attempt at the Air India divestment successful. In a fresh attempt at offloading more debt from Air India's balance sheet, the government is planning to waive off the airline's payables to oil companies, airports and other vendors amounting to around Rs 22,000 crore, sources aware of the development said.

This is over and above the airline's total debt at nearly Rs 60,000 crore, sources said. As per provisional figures for 2018-19 (Apr-Mar), total debt of the national carrier stood at Rs 58,351.93 crore.

"We are planning to sell Air India largely with the loans against the assets. Aircraft and slots are the two main assets for the airline and we are confident that this will be a lucrative offer for any bidder," one of the sources said.

While the airline's total debt and payables to vendors etc amount to over Rs 80,000 crore, the government has already decided to transfer Rs 29,464 crore to a special purpose vehicle called Air India Asset Holding Company. An amount of around Rs 15,000 crore is also expected from the monetisation of its land assets in the country and across the world, sources said. Air India has office space, land etc in cities like Jaipur, Pune, Chennai, Tokyo, Nairobi, London, among others.

The government is unlikely to float the expression of interest document for divestment of Air India this month as it is still in the formulation stage. Meanwhile, officials are in Singapore for conducting a roadshow to sell the airline. The panel of ministers formed to steer the divestment process this time under the leadership of Home Minister Amit Shah is yet to decide on a date to hold its next meeting.
12/11/19 CNBC TV18
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