The government is looking at transferring Air India’s non-core assets and “unsustainable debt” to a special purpose vehicle (SPV) as part of measures to revive the national carrier, a top official said on Tuesday.
Govt plans to transfer Air India’s non-core assets to special purpose vehicle
After the proposed strategic disinvestment of Air India failed to take off in May, the government has been looking at ways to bolster the carrier. Against this backdrop, the official at the Finance Ministry said that efforts are on to sell non-core assets of Air India.
As part of the disinvestment process, which has been shelved for now, the government had proposed creating a special purpose vehicle wherein the non-core assets and “unsustainable debt” would be transferred there. The official said that proposal and encashing the non-core assets is being pursued as it would also help the airline stand on its feet.
“This was also proposed for Air India when we had gone for hunting of proposed bidder for Air India,” the official added. The national carrier’s debt burden was more than Rs 48,000 crore at the end of March 2017. It is staying afloat on a bailout package extended by the previous UPA regime in 2012.
In the current financial year, the airline has received an equity infusion of Rs 650 crore up to June. TAP and a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012. Last month, the government sought Parliament’s nod for Rs 980 crore as supplementary grants for equity infusion into the airline. According to the official, there is no plan “as of now” to make additional capital infusion into Air India.