Govt gives ex-post facto approval for creation of SPV for Air India's disinvestment

The Union Cabinet on Thursday gave its ex-post facto approval for the creation of the Special Purpose Vehicle (SPV) and associated activities for the disinvestment of Air India and its subsidiaries.

An SPV namely Air India Assets Holding Ltd. (AIAHL) has been created for warehousing accumulated working capital loan not backed by any asset along with four Subsidiaries (Air India AirTransport Services Ltd. (AIATSL), Airline Allied Services Ltd. (AASL), Air India Engineering Services Ltd. (AIESL) and Hotel Corporation of India Ltd. (HCI), non-core assets painting and artefacts and other non-operational assets of Air India Ltd. to an SPV.

The Ministry of Civil Aviation (MoCA) issued an order for creation of a new SPV. The SPV, Air India Assets Holding Ltd. was incorporated on January 22 last year.

The Board of Directors of SPV includes CMD, Air India Ltd. and Joint Secretaries of MoCA, Department of Expenditure, Department of Economic Affairs, DIPAM and Director (Finance) Air India Ltd.

As on date, one subsidiary, namely AIATSL has been transferred to AIAHL, as per the share purchase agreement between Air India Ltd. and AIAHL subject to conditions precedents which include lenders' approval.

Preliminary Information Memorandum (PIM) for disinvestment of AIATSL has been issued on February 12 by AIATSL with the last date of submission of Expression of Interest (EoI) on March 26 this year.

The government has decided to transfer following to the newly-created SPV -- debt of Air India Ltd. amounting to Rs 29,464 crore, the subsidiaries which are not part of Air India strategic disinvestment viz. AIATSL, AIESL, AASL are to be shifted to the SPV, and non-core assets, painting and artefacts and other non-operational assets of Air India Ltd.