The civil aviation ministry has told Air India that it should prepare 2018-19 financials for itself and its subsidiaries by end of June as the Prime Minister's Office (PMO) has decided to speed up the disinvestment process of three of its wings, according to an official document.
After a botched attempt to sell Air India in May last year, a panel led by Finance Minister Arun Jaitley had decided in June to scrap the stake-sale plan for the time being. It was then decided to infuse more funds into the carrier and cut down debt by raising resources by selling land assets and other subsidiaries.
Air India has a total debt burden of around Rs 55,000 crore.
On April 1 this year, a meeting was held in the PMO under the chairmanship of Nripendra Misra, the principal secretary to the prime minister, to discuss matter regarding strategic disinvestment of Air India and its subsidiaries.
"A meeting was held on April 1 under the chairmanship of the Principal Secretary to PM in which it was, inter-alia, decided to speed up the process of disinvestment of AIATSL, AIESL and AASL," civil aviation secretary Pradeep Singh Kharola told Air India's Chairman and Managing Director (CMD) Ashwani Lohani in a letter dated May 6.
Air India Air Transport Services Limited (AIATSL), Air India Engineering Services Limited (AIESL) and Airline Allied Services Limited (AASL) are subsidiaries of the national carrier.
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Kharola said that in order to proceed with disinvestment process of Air India and its subsidiaries, audited financials for 2018-19 will be required.
"I would, therefore, request you to kindly get financials of Air India and its subsidiaries for the financial year 2018-19 finalised by end of June," Kharola said.
Aviation secretary also said that since the accounts for 2018-19 would form the "basis of bidding", it is necessary that they are prepared with "utmost caution so as to reflect the correct financial status".
He added that contingent liabilities must be thoroughly verified. Moreover, he added that "account receivables" and "account payables" must be verified and confirmed from the other parties.
"A physical verification of the inventories need to be done so as to ensure that the value of inventories shown on the balance sheet matches with the assets physically," Kharola told Lohani.
The secretary also told Air India CMD that a list of all pending litigations have to be drawn up.
As a precursor to sale of Air India, the cabinet on February 28 had approved setting up of a special purpose vehicle (SPV)—Air India Assets Holding Limited—to transfer Rs 29,464 crore worth loans of the national carrier and its four subsidiaries.
The four subsidiaries which have been transferred to the SPV are AIATSL, AASL, AIESL and Hotel Corporation of India (HCI).