The government would be transferring as much as Rs 29,000 crore of the airline’s Rs 55,000 crore debt to a Special Purpose Vehicle (SPV), a move that would significantly reduce the airline’s contributions towards annual interest payments, Civil Aviation Secretary RN Choubey said. We are providing a partial but significant relief to Air India, he added.
On November 27, the Centre has cleared the decks for the strategic sale of Air India’s ground handling subsidiary-Air India Air Transport Services Limited (AIATSL)-by deciding its 100 per cent disinvestment in ownership.
Ministry of Civil Aviation (MoCA) had decided to proceed with the strategic sale of AIATSL after a ministerial panel meeting on Tuesday. The proceeds from the sale of AIATSL would be used to pay off the debt of AI.
Earlier the ministerial panel in June this year had decided to cut down debt and raise resources by selling land assets and other subsidiaries. Earlier, on Nov 20, the Minister of State for Civil Aviation, Jayant Sinha had said that the government’s disinvestment plan in Air India has been put aside for time being as it is working on the revival of the debt-ridden enterprise.