1 min read.Updated: 19 Sep 2019, 11:46 PM ISTRhik Kundu
The Civil Aviation Minister said another GoM meeting on Air India will take place soon
The Air India divestment process is truly underway, said Puri after the GoM meet ended
NEW DELHI :
The process of privatising national carrier Air India Ltd is underway and the government will take all decisions within a specified time frame, civil aviation minister Hardeep Singh Puri said on Thursday.
“It was a very productive meeting. We are going to take all the decisions that are to be taken in a defined period of time," Puri said after the first meeting of a group of ministers (GoM) on Air India. “The Air India divestment process is truly underway," he added.
Besides Puri, the GoM comprises finance minister Nirmala Sitharaman, railways minister Piyush Goyal, and home minister Amit Shah. The ministerial panel, formed to oversee the sale of the loss-making flag carrier, will meet again shortly, Puri said.
The first meeting of the new GoM comes after the government tried unsuccessfully to sell Air India last year. Investors were apprehensive about the airline’s large debt and the government retaining a minority stake in the carrier post privatization.
Air India’s net debt swelled from about ₹55,000 crore at the end of FY18 to ₹58,351.93 crore at the end of FY19.
About half of the debt was transferred to a special purpose vehicle (SPV), Air India Asset Holding Ltd (AIAHL), which was set up in January 2018, as part of a financial restructuring plan. The government had transferred debt of ₹29,464 crore, as well as non-core assets, and non-operational assets of Air India to the SPV.
AIAHL will raise about ₹29,000 crore through bond sales this month to retire a part of its debt, which is expected to make the airline attractive to potential buyers.
The rupee-denominated bond issue, and the subsequent repayment of the working capital debt, will nearly halve the interest servicing outgo for Air India from ₹4,500-5,000 crore a year to about ₹2,700 crore a year,