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Air India to turn financially attractive before divestment

IANS  |  New Delhi 

More investments with strict riders have been planned to make financially attractive before starting any new round of divestment, has said.

As per the plan, would be allowed to induct more aircraft to grow its market share, while a will scout for the best management talent for the company.

The group with a consolidated debt level of around Rs 55,000 crore will also be required to sell non-core assets, and adhere to a Rs 2,000 crore cost saving plan.

According to the minister, the financially challenged will induct three aircraft on a dry-lease within the next two months.

"placed order for induction of 27 A320 NEO on dry lease basis. Out of 27, 24 have already been inducted and remaining 3 will be inducted within next two months," the told IANS.

In 2018, the company failed to find any suitors during the last and the only attempt by the government to divest its stake in the business.

"Government has prepared a 'Revival Plan' of Air India... which includes a comprehensive financial package, transferring non-core debt and assets to an SPV (special purpose vehicle)," Prabhu told IANS.

"We have also proposed to induct eminent persons on the board of Air India through 'Search-cum-Selection Committee' process."

Last month, the approved creation of an SPV -- Air India -- for transferring the accumulated working capital loans of the national carrier.

It has also approved the associated activities for the disinvestment of Air India and its subsidiaries or joint ventures.

Accordingly, Rs 29,000 crore debt of Air India along with four of its subsidiaries will be transferred to the SPV. Non-core assets like paintings and artefacts and other non-operational assets will also be transferred to the SPV.

The move assumes significance as it will lessen the interest payment obligation of the airline.

The Centre has also invited "Expression of Interest" for strategic of the carrier's ground handling subsidiary Air India (AIATSL) which has been transfeered to the SPV.

The disinvestment proceeds from the sale will be used to pay off the debt incurred by the SPV.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, March 17 2019. 12:14 IST