100% sell off or Air India? |
The Union Cabinet of India will soon decide the fate of Air India by deliberating on three options to divest the government`s majority stake and consider the creation of a special purpose vehicle (SPV) to get rid of a major portion of its more than Rs50,000-crore debt. The three options on the table are a full 100% sell-off, a 74% stake sale or retaining a 49% share in the airline. While the NITI Aayog and the Finance Ministry are in favour of an outright sale of the ailing airline, the Civil Aviation Ministry is keen that the government continues to remain a stakeholder in the national carrier after handing over the management to the private sector. The Cabinet will also consider a proposal to clear up Air India`s liabilities by forming a Special Purpose Vehicle (SPV), which will house a portion of its non-aircraft debt along with its subsidiaries and real estate assets. A major portion of the working capital loan, subsidiaries and prime properties owned by Air India is proposed to be housed in an SPV. Of the airline`s over Rs 30,000 crore total working capital loan, Rs 25,000 crore will be earmarked for the SPV. Air India has a total debt of around Rs 52,000 crore which comprises of Rs 22,000 crore as aircraft loan and the remaining as working capital loan.
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