Modi said to exclude $4.7-bn debt before AI sale

India plans to exclude more than half of the $7.6 billion debt owed by the struggling national airline to help burnish its appeal as Prime Minister Narendra Modi presses ahead with a sale, people with knowledge of the matter said.
 
The government proposes to transfer all of Air India’s non-aviation assets and short-term loans of as much as Rs 30,000 crore ($4.7 billion) to a separate company, readying the airline for prospective buyers, the people said, asking not to be identified discussing confidential information. Authorities aim to kick off the bidding process before March 31, they said.
 
Such a move would mean the government absorbing the money-losing firm’s working capital loans, real estate from Tokyo to London and two hotels. The buyer will be left with aviation-related assets and about Rs 20,000 crore of loans borrowed to acquire aircraft, the people said. Finance Ministry spokesman D S Malik didn’t respond to calls seeking comment.

 

A successful sale of Air India is crucial for Modi, who wants to showcase his commitment to reducing the state’s role in business after many of his predecessors failed to dispose of the carrier in the face of stiff political opposition.