The government plans to soon initiate the strategic sale process for at least four subsidiaries of loss-making Air India, including Airline Allied Services Ltd (AASL) and Hotel Corporation of India (HCI).
The government plans to soon initiate the strategic sale process for at least four subsidiaries of loss-making Air India, including Airline Allied Services Ltd (AASL) and Hotel Corporation of India (HCI), according to officials.
Besides, plans are on the anvil for selling the headquarter building of Air India in the national capital as well as various other land assets and buildings of the airline in different parts of the country.
The government has prepared a list of the airline’s assets that could be hived off as part of the strategic sale plan for Air India and its subsidiaries, officials said.
According to them, the disinvestment process is likely to be initiated soon for four Air India subsidiaries — AASL, HCI, Air India Air Transport Service Ltd (AIATSL) and Air India Engineering Service Ltd (AIESL).
While AASL, under the name Alliance Air, provides regional air connectivity, HCI owns and operates two hotels in Delhi and Srinagar, among others.
AIATSL provides ground handling and cargo handling services. AIESL is mainly into maintenance, repair and overhaul of engines. Apart from the headquarters building, other assets proposed to be sold include Air India properties in Mumbai and Delhi.
Officials said the government also plans to sell various art works and artefacts. In June, a ministerial panel chaired by Finance Minister Arun Jaitley deferred the strategic sale of the government’s 76 per cent stake in Air India. Instead, it was decided that the government would look at sale of assets and subsidiaries of the national carrier to reduce the debt burden.
Air India, which has been in the red for long, had a debt burden of Rs 48,000 crore at the end of March 2017. The government had originally proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players. However, the offer failed to attract any bidder when the deadline for initial bids closed on May 31.
The national airline is staying afloat on a bailout package extended by the previous UPA regime in 2012 and the government is also looking at ways to infuse more funds into the carrier.
For the current fiscal, the government expects to raise Rs 80,000 crore from strategic as well as minority stake sales in public sector enterprises.
So far this fiscal, the government has raised over Rs 9,220 crore by divesting stakes in state-owned companies. Last year, the government had mopped up over Rs 1.03 lakh crore from PSU disinvestment. This was aided by country’s oldest gas producer ONGC’s Rs 36,915 crore acquisition of government-owned fuel retailer Hindustan Petroleum.