The airline 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 airline will induct three aircraft on a dry-lease within the next two months.
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 airline 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."
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 divestment of the carrier's ground handling subsidiary Air India Air Transport Services Ltd (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.
(Rohit Vaid can be contacted at email@example.com)
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