Govt has settled Rs 61,000 cr debt, liabilities of Air India: DIPAM Secy

In a Q&A, Tuhin Pandey also said govt plans to list LIC in this financial year

The Centre has already settled over Rs 61,000 crore worth debt and excess liabilities of Air India as it handed over the national carrier to Tata Sons on Thursday, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey told Nikunj Ohri in an interview. The Air India Asset Holding Company Ltd (AIAHL) has paid off debt of Air India of about Rs 46,000 crore, and settled about Rs 15,000 crore of excess liabilities such as unpaid fuel bills. Tatas have also paid off the retained debt of Rs 15,300 crore through refinancing. Pandey also said that the government plans to list LIC in the ongoing financial year. Edited excerpts from the interview

By when will the debt of Air India transferred to AIAHL be settled?

Current liabilities in excess of current assets of Air India has been broadly settled by AIAHL through support from the government. AIAHL has paid off debt of Air India of about Rs 46,000 crore and settled about Rs 15,000 crore of excess liabilities that included unpaid fuel bills and payment to other operational creditors. Broadly, most of the liabilities coming to AIAHL has been squared off through budgetary sources. Liabilities have been settled rather than resting with AIAHL. Instead of postponing payment for future, these have been settled so that interest does not accrue. Tatas have paid off Rs 15,300 crore debt of Air India using the refinancing route.

The new balance sheet has been prepared on January 20, the date of completion of condition precedents (CP).

Have all government nominees resigned from Air India’s board?

All government nominees have resigned from the board of Air India. All four Air India directors would continue to be on the board of Air India. That is the new buyer’s choice.

The airline would now be able to improve its service, protect employee jobs, acquire new planes, do capital infusions, retrain the people. To us, the Air India is a very important organisation and it needs to grow in order to serve the Indian economy.

Is the government hopeful of achieving this year’s Rs 1.75 trillion target?

Right now we are focusing on the listing of Life Insurance Corporation of India (LIC), let’s hope we are able to pull it off. We are looking to file the DRHP early-February. Fund bifurcation has been done, and participating and non-participating fund. Accounts until September have been finalised using the fund bifurcation. Reporting actuary Miliman Advisors is close to finalising the embedded value report which will be shared with IRDAI. We plan to list LIC on the exchanges in the ongoing financial year.

What’s the update on privatisation of BPCL, Shipping Corporation, BEML and NINL?

In BPCL, we are trying to push bidders as they are taking time. As it’s a competitive bidding process, before inviting financial bids we have to wait for the interested parties to be ready to bid.

Privatisation of Shipping Corporation is also going on. Transaction advisors are in touch with bidders and sorting out their issues. Demerger process to separate non-core assets of the company is presently going on. In BEML as well, non-core assets are being separately. Once this is completed, financial bids will be invited. There are many complexities involved in concluding a transaction such as approvals that depends from company to company, so predicting a date of completion of the transaction would be difficult.

New buyer of Nilachal Ispat Nigam will be announced soon. The privatisation process will be completed in a month or so.