Air India today saw good response to an auction of its properties with 10 of them receiving bids worth more than their reserve price.
Air India today saw good response to an auction of its properties with 10 of them receiving bids worth more than their reserve price. The airline is seeking to divest its non-core assets. The bidding process for its 14 properties located in different parts of the country concluded today. Valued above Rs 500 crore, nearly 30 properties will be auctioned by the first week of September by the state-run auctioneer, MSTC Ltd.
These properties include flats, residential and commercial land plots as well as office buildings across the country. “We have received good bids for the properties that were put up for auction today. We got bids above the reserve price for 10 out of the total 14 properties,” Air India CMD Rajiv Bansal told PTI. “The proceeds from this will go towards paying our debts, although these are baby steps,” he said.
The airline’s total debt stood at Rs 48,876.81 crore at the end of March 2017. Of this, Rs 17,359.77 crore is aircraft loans and the rest Rs 31,517.04 crore capital loans. The monetisation of Air India’s non-core assets is part of a strategy chalked out in 2012 to turnaround the airline.
The plan provides for equity infusion in the airline worth Rs 30,231 crore up to 2021 as well as generating Rs 5,000 crore by way of sale, leasing or developing an asset as a joint venture. The Union Cabinet has given its in-principle approval for disinvestment of Air India and a group of ministers is currently working on a strategy to the national carrier.