New tender for privatisation planned

The government on Thursday hinted that it may remove more debt from Air India’s balance sheet ahead of the national carrier’s privatisaion.

Earlier, it had transferred half of the loan amount of ₹58,000 crore to a special purpose vehicle (SPV).

The admission comes at a time when the government is preparing to float a new tender to invite bids for Air India’s privatisation, after a similar attempt last year failed to elicit any interest from private players.

A Group of Ministers (GoM) headed by Home Minister Amit Shah met in September after the formation of the new government, and decided to restart the disinvestment process for the national carrier, including 100% stake sale of Air India along with its subsidiaries Air India Express and Air India SATS.

“Further, it was decided in the said meeting that debt allocation between Air India and the SPV [is] to be revisited at a later date, closer to disinvestment,” Minister of State for Civil Aviation Hardeep Singh Puri told the Lok Sabha, referring to a meeting last year headed by the then Finance Minister Arun Jaitley.

At the meeting, the GoM appointed to chalk out Air India’s privatisation strategy had decided to hive off ₹29,000 crore from Air India to Air India Assets Holding Limited (AIAHL) to make it attractive for potential buyers. AIAHL has already restructured a large chunk of the loan transferred to it at a lower interest rate.