AI to fast track asset monetisation plan

Sale of land, foreign properties to be done by March 2014; will raise Rs 1,000 crore

Air India will fast track its Rs 5,000 crore asset monetisation plan in the wake of anticipated delay in equity infusion by government. On Thursday the airline board gave its nod to sale of land in Comibatore, Chennai and Kolkata and its properties in Hong Kong and Tokyo.

The sale of the land and foreign properties will be done by March 2014 and raise Rs 1,000 crore.

Air India plans to earn Rs 5,000 crore through sale and lease of real estate and land over a ten year period but now the company is aiming to achieve  the target in half the period. Air India's joint managing director Syed Nasir Ali is supervising the asset monetisation plan.

The delay in equity infusion and litigation over hiving off ground handling and engineering departments is reason the airline management giving a push to the asset monetisation. The funds raised through sale of assets will be used the airline's staggering Rs 42,000 crore debt.

Under the turn around plan Air India is expected to receive Rs 30,000 crore in form equity and cash support from government till 2020-21 but now infusion may take place over a longer period. According to reports the airline was to receive Rs 8,500 crore in the current fiscal from government but received only half the amount. The balance will come next year.

In February the airline formally decided to hive off its engineering and ground handling departments. This move will reduce the airline Rs 3,000 crore annual wage bill but the move has been challenged by the engineering union through a writ petition in the Bombay High Court. A senior company executive however said the union was not against the hiving off of  engineering MRO per se and the objection was merely to transfer of employees.

"The entire asset monetisation programme will be conducted in a fair and transparent manner. We have constituted a three member committee comprising of retired Supreme Court judge, retired central vigilance commissioner  and retired Comptroller and Auditor General to oversee the process. We will have e-auction of properties," he added.