New Delhi: In a renewed push to privatise Air India, the government is mulling to cut the Rs 23,286 crore debt that is required to be absorbed by the successful bidder of the carrier.
According to sources, an inter-ministerial panel led by the Union Home Minister Amit Shah is to give nod to this proposal of cutting down the multi-crore debt. A meeting between the panel is likely to take place in the next week.
The development comes after the Centre failed to privatise the airline after several attempts and had to extend the deadline to submit bids for the national carrier four times. The process of stake sale in the national carrier was initiated on January 27.
The fourth extension was given on August 25 when the deadline for placing bids for Air India was pushed by two months to October 30 as the Covid-19 fallout has disrupted economic activity globally.
The debt of Air India as on March 31 2019 was Rs 58,255 crore. Later in 2019, Rs 29, 464 crores of this debt was transferred from Air India to a government-owned special purpose vehicle called Air India Assets Holding Company Limited (AIAHL).
This is the second attempt by the government to sell Air India. The first attempt at selling a stake in the carrier in March 2018 failed as investors turned uncomfortable with the government retaining a 24% stake in the airline as well as the requirement to stay invested for at least three years.
In a press conference on October 10, 2020, Air India Chairman and Managing Director (CMD) Rajiv Bansal had said that the divestment process has not been delayed. The bidders are looking at their finances and that's why they have been given some time so that the deal is beneficial for both sides.
Recently, in a letter to Rajya Sabha MP Binoy Sharma, Civil Aviation Minister Hardeep Singh Puri stated that Air India is facing a very challenging financial situation. "The Covid-19 outbreak has very seriously impact impacted the airlines sector and currently the airline operations of the company have taken a serious hit," the Minister said.
