The Centre, which plans to sell Air India latest by the end of the financial year, is likely to reduce the debt burden of the Maharaja by paying off a major chunk of the latter's loan. According to a report by the Economic Times, the Centre has finished raising Rs 22,000 crore through issue of bonds. An additional transfer of Rs 7,464 crore of local bonds to the accounts of Air India Asset Holdings (AIAHL) from Air India is expected to halve the debt burden of the national carrier.
Air India's total loan amounts to Rs 58,000 crore. Mounting debt was one of the reasons why the Centre's divestment attempts failed last year. With the debts halved, Air India will be left with about Rs 28,000 crore loans on its books. Of this, about Rs 12,500 crore are against aircraft loans. The rest Rs 15,500 crore are working capital loans, the report added.
The Centre is looking to sell its 100 per cent in state-owned Air India. The government has fast-tracked the process with the formation of the Group of Ministers (GoM), headed by Home minister Amit Shah, and comprising Finance minister Nirmala Sitharaman, Civil Aviation minister Hardeep Puri and Railway and Trade minister Piyush Goyal. The panel first met on September 19.
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In addition to fully exiting Air India, the Centre is also ready to enter into a deal allowing future owners to lay off employees after a period of one year post divestment.
The Centre, which targets Rs 1.05 lakh crore through divestments in the current financial year, is keen on getting the right bidders for Air India this time as a similar attempt failed to take shape last year in a huge setback. A cash-strapped Centre is looking to receive Rs 60,000 crore from the sale of Air India. Air India, which has 128 planes, has seen its net debt rising to Rs 58,351.93 crore at the end of March from about Rs 55,000 crore a year ago.