Public sector carrier Air India is looking to sell properties worth Rs 250 crore to raise funds as a part of its larger plan to sell and rent out idle assets to reduce debt and losses, civil aviation ministry officials said on Friday.
The asset monetisation plan has already been delayed by almost a couple of years. The beleaguered airline’s plan to raise a total of Rs 5,000 crore through asset monetisation — Rs 1,200 crore in 2013-14, Rs 2,000 crore in 2014-15 and Rs 1,800 crore in 2015-16 — is yet to take off due to legal issues over title deeds and ownership clauses.
The properties for which negotiations are under way are in Mumbai, Chennai and Coimbatore. Officials said there are four flats on Mumbai’s posh Pedar Road, which State Bank of India is in talks to buy, and are expected to yield Rs 90 crore. Then, there is land in Chennai (worth Rs 120 crore) and Coimbatore (worth 40 crore).
The Cabinet note for the sale, officials said, has almost been finalised. “Once that comes through, the sale process will begin,” said ministry officials. The sale will be done through the e-tendering process to ensure transparency.
However, the land/flats will be sold either to a public sector undertaking or a government organisation and not to a private party, said officials.
The government-funded carrier is surviving on Rs 30,000-crore bailout package from the Centre — the fund will be disbursed over a nine-year period, in what is called Air India’s turnaround plan (TAP). The airline has a debt of Rs 50,000 crore and accumulated loses of about Rs 36,000 crore.
Apart from the properties in the three cities, there are two in New Delhi that Air India is considering to lease out — a residential colony in South Delhi’s Vasant Vihar and a parcel of land at Baba Kharag Singh Marg in central Delhi.
The valuation of these two properties is yet to be finalised as their lease has run into a tangle with the urban development ministry.
Officials said the properties in Delhi were leased long back for specific reasons and, as per practice, if they are not used for the designated purpose, the land/premise has to be returned to the urban development ministry.
The parcel of land on Baba Kharag Singh Marg was given to Indian Airlines for development of office, which came to Air India after the merger of the two state-owned airlines in 2007. “The properties were given on lease to the airline and they want to further lease them out for commercial purposes,” said officials.
* Air India planned to raise a total of R5,000 crore through asset monetisation — R1,200 crore in 2013-14, R2,000 crore in 2014-15 and R1,800 crore in 2015-16
* The plan is yet to take off due to legal issues over title deeds and ownership clauses
* The properties for which negotiations are under way
are in Mumbai, Chennai and Coimbatore
* There are four flats on Mumbai’s posh Pedar Road, which SBI is in talks to buy, and are expected to yield R90 crore
* Also, there are land parcels in Chennai (worth R120 crore) and Coimbatore (worth R40 crore)
* The Airline also plans to lease out two properties in Delhi, but these have run into legal trouble