The government is keeping an eye around USD 1 billion (about Rs.7,000 crore) from the sale of national carrier Air India in the next financial year, said the government official on Wednesday.
The government will initiate the process of strategic disinvestment of Air India in the second half of 2019-20 and in between it would work towards selling some of its subsidiaries and monetise assets. Air India has a debt burden of Rs.55,000 crore.
Last year in November, The Finance Minister Arun Jaitley had approved transferring Rs.29,000 crore debt to a special purpose vehicle (SPV) – Air India Asset Holding Company.
After the careless attempt to sell Air India’s asset in May last year, Mr Jaitley led panel in June decided to scrap the stake sale plan for the time being. It was decided to pervade more funds into the carrier and cut down debt by raising resources by selling land assets and other subsidiaries.
Recently, the government had planned to offload 76% equity share capital of the national carrier Air India as well as transfer the management control to private players. The buyer was required to take over Rs.24,000 crore debt of the carrier along with over Rs.8,000 crore of liabilities. However, the stake sale failed to attract any bidders when the bidding process completed on May 31.
In August 2018, the government had received Parliament nod for Rs.980 crore equity infusion in Air India under a “turn around plan”. In last year the Parliament had approved a further Rs.2,345 crore equity infusion into the airline.
The ministerial panel led – Arun Jaitley has already cleared the strategic sale of Air India’s ground handling subsidiary, Air India Air Transport Services.
The civil aviation ministry told the Lok Sabha that the government has prepared a revival plan for Air India in December last year.
This year the Government is planning a comprehensive financial package, including the transfer of non-core debt and assets to an SPV, implementation of robust organisational and governance reforms by the board and differentiated business strategies for each of the core businesses of Air India.