Govt mulls excluding debt of Air India before stake sale

The government, which is planning to sell a stake in its state-run flag carrier, Air India, is considering options to keep out at least a part of its $8 billion of debt to help lure investors, the Civil aviation minister said. 

Air India’s assets such as real estate could also be spun off into a separate company, Ashok Gajapathi Raju said on Friday. 

A call will be taken by a group of ministers headed by Finance Minister Arun Jaitley, and the government is open to all options, including allowing foreign investment in the carrier, he said. “Its books are bad, you can’t leave it like that,” Raju said in his office. “Suppose a portion of its debt is removed, non-aviation-related assets are removed and put into a shell company owned by the government, I think things will work.” 

A successful sale of Air India is the key for Indian Prime Minister Narendra Modi, who has promised reforms and vowed to improve government finances.