You are here: Home » News-IANS » Business-Economy
Business Standard

Government to sell Air India's ground handling arm

Business Finance

IANS  |  New Delhi 

The Central government will divest 100 per cent stake in Air India's ground handling subsidiary to partially retire the national passenger carrier's accumulated debt.

Accordingly, an inter-ministerial panel, Air India Specific Alternate Mechanism, decided on Tuesday to divest the government's stake in Air India Air Transport Services Ltd (AIATSL).

The decision was taken after the panel which is headed by Finance Minister Arun Jaitley met here. It assumes significance as the amount raised from the divestment of AIATSL will be used to retire some of the accumulated debt of Air India.

A senior government official said the strategic disinvestment of ground handling subsidiary AIATSL will be done after the ground handling unit is transferred to a SPV (special purpose vehicle).

The official told reporters that the EoI (Expression of Interest) document for the subsidiary will be issued after its transfer to the SPV.

AIATSL provides ground handling service at most of the airports in India. It was operationalised in February 2013 and in 2016-17 the subsidiary earned a profit before tax of Rs 61.66 crore.

Earlier, the inter-ministerial panel had decided to revive the national passenger carrier through sale of land and other assets and to offload its debt to an SPV which has already been incorporated.

Prior to the current move, the government had offered to sell 76 per cent stake in Air India. However, the state-owned carrier, which has accumulated losses of over Rs 48,000 crore, failed to attract any bidder.

On May 31, the Ministry of Civil Aviation said that "no response" was received even during the extended submission deadline for the EOI bids under Air India's divestment process and the "further course of action will be decided appropriately".

The government on May 1 had released a detailed document on clarifications sought by interested bidders regarding the divestment process. This had outlined that net current liabilities were Rs 88.16 billion (Rs 8,816 crore) and "these will remain with AI and AIXL (Air India Express) as these have been incurred in the course of business".

On March 28, a Preliminary Information Memorandum (PIM) inviting EOIs for the strategic divestment of AI was issued, along with the airline's shares in AIXL (Air India Express) and AISATS (Air India SATS Airport Services) from private entities including the airline's employees.

The Central government owns 100 per cent equity of Air India.



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

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 27 2018. 22:32 IST