Air India is currently reeling under a debt of Rs 80,000 crore. With the losses of the airline mounting, the government is under tremendous pressure to get Air India divested.
Taking state-run carrier Air India’s privatisation process a step ahead, Home Minister Amit Shah-led Group of Ministers has approved the Expression of Interest and share purchase agreement (SPA), a senior government official said, PTI reported. The same will be issued in January itself as the government looks to make progress in the Air India stake sale. The government held the last GoM meeting in September last year. With the losses of the airline mounting, the government is under tremendous pressure to get Air India divested. To that end, the government has also approved major debt recast of the airline with about 80% of the airline’s debt likely to be moved to a special purpose vehicle (SPV). To make the airline an attractive purchase for a private player, the government is willing to keep only Rs 10,000-15,000 crore debt in the airline’s books, ET Now reported. Air India is currently reeling under a debt of Rs 80,000 crore.
The state-run carrier has been struggling to stay afloat even after loads of money going into keeping the airline functional. From FY12 to date, the airline has received an equity infusion of Rs 30,520 crore, Hardeep Singh Puri, Civil Aviation Minister, said in a written reply to the Lok Sabha during the Winter Session. Even then, the airline is likely to shut down in the next six months if a suitor does not emerge, a senior official had said recently, according to a PTI report. The government now looks to give up 100% of its stakes in the airline and the MoS Hardeep Singh Puri has time and again maintained that it is not the government’s business to run a business. “AISAM has approved the 100% sale of the Government of India stake in Air India for the re-initiated strategic disinvestment of Air India,” Hardeep Singh Puri said in a written reply to the Lok Sabha. The government has been trying to sell off the national carrier for a while now as it continues to remain a loss making enterprise.