Govt to sell Air India's ground handling arm to pare Rs50,000-cr debt
28 November 2018
A ministerial panel led by finance minister Arun Jaitley on Tuesday decided to sell 100 per cent of Air India’s ground handling subsidiary, Air India Air Transport Services Ltd (AIATL), and use the proceeds to retire a part of the national carrier’s huge debt pile of around Rs50,000 crore.
The government plans to hive off AIATL into a special purpose vehicle (SPV), which is directly owned by the government. Once the transfer is completed, expressions of interest in the company will be invited, civil aviation secretary RN Choubey told reporters after the meeting.
The proceeds of the sale will be used to retire part of Air India’s accumulated debt of over Rs48,000 crore while also helping the airline to improve its operational efficiency under a turnaround and generate investor interest the loss-making national carrier.
The approval is part of the government’s plan to sell off some of Air India’s non-core assets, in order to revive the fortunes of the national carrier.
The Alternative Mechanism on Tuesday approved EoI (Expression of Interest) together with Preliminary Information Memorandum for sale of Air India Air Transport Services Limited (AIATSL), according to civil aviation ministry sources.
The meeting was attended by Jaitley and civil aviation minister Suresh Prabhu, among others.
The ministerial panel also decided to go ahead with Pawan Hans sale for which a request for proposals has already been floated.
Incorporated in June 2003, AITSL provides all types of services at airport, including ground handling services connected with passenger, ramp, security and cargo for Air India.
The ministerial grouping had decided to revive Air India after the government's strategic stake sale offer failed to attract any bidders earlier this year.
The latest strategic sale plan follows a decision by the ministerial panel in June to make Air India competitive, by cutting down debt and raising resources by selling land assets and other subsidiaries.