Ministry seeks ‘asset valuer’ proposals for Air India divestment

Taking forward its disinvestment in debt-ridden Air India, the government has invited proposals to appoint an "asset valuer" for the national carrier, its subsidiaries and joint ventures.

According to the ministry of civil aviation, the asset valuer will carry out valuation of land and buildings, aircraft, including airframes and engines, spare engines, maintenance repair and overhaul facilities, among others.

"The government of India (GoI) has 'in-principle' decided to consider the disinvestment of the AI group as a whole or its constituents fully or part thereof through strategic sale with transfer of management control," a 'Request for Proposal' document issued by the ministry on Thursday said.

"For this purpose, Ministry of Civil Aviation on behalf of Government of India, requires the services of reputed asset valuer to carry out the valuation."

Interested parties are required to submit their proposals by 16 October.

''The above valuation of assets is to be done for Air India and its subsidiaries/JV in India and its overseas offices. The valuation is to be done keeping in view the objective of disinvestment and would be changed if there is a change in the objective,'' the ministry noted in the proposal.

AI operates in 42 international destinations and over 70 domestic stations. It has an operating fleet of 142 aircraft comprising 65 A-320, 15 B777, 24 787s, 23 737-800 and 11ATRs and 4 B747 planes.

Earlier, a ministerial group was formed to look into the disinvestment modalities.

The group - Air India-specific Alternative Mechanism - headed by finance minister Arun Jaitley is mandated to guide the divestment process and to decide on key issues such as treatment of AI's debt and hiving off of its assets.

The airline, under a massive debt burden of Rs50,000 crore, had posted an operating profit of Rs105 crore in 2015-16. For the 2016-17 fiscal, the company is expected to report an improved operating profit margin.

The AI group operates to over 40 international destinations and over 70 domestic stations. It has an operating fleet of 142 aircraft comprising 65 A-320 aircraft, 15 B777 aircraft, 24 787 aircraft, 23 737-800 and 11 ATRs and 4 B747 aircraft.

The airline has five subsidiaries and a JV company.