New Delhi: A group of Ministers of the Ministry of Home Affairs (MHA) chaired by Home Minister Amit Shah on Thursday met in the national capital to hold a discussion regarding the disinvestment of Air India, and a transfer of debt to the Special Purpose Vehicle (SPV).
A panel of Civil Aviation Minister Hardeep Singh Puri, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal are present at the meeting that will establish a decision on the privatization of the national carrier.
However, Civil Aviation Minister Hardeep Singh Puri refused to comment on the developments of the meeting. “I’m not in a position to make any announcements, other than the fact that the meeting took place, please allow the process to move forward, it was a very productive meeting, all issues have been taken on board,” he said.
The MHA meeting follows a preliminary meeting on Wednesday to discuss the alternate mechanism resulting out of the carrier’s debt position. Air India is presently at a debt of Rs 60,000 crore that includes the company’s long-term loan for aircraft purchase and working capital.
Nearly Rs 10,000 crore additional debt over and above the earlier debt of Rs 29,464 crore was proposed to be moved to Air India Assets Holdings Ltd (AIAHL), an SPV of the state-owned airlines that was created in February this year in order to transfer part of its debts and assets.
“Only Rs 18,000 crore of debt would remain on the books of Air India when expression of interest (EoI) would be invited and preliminary information memorandum (PIM) would be issued,” an official told IANS aware of the disinvestment plan.
Meanwhile, Air India Air Transport Services Limited (AIATSL), another one of the subsidiaries, has already been shifted to the SPV on net worth basis.
Moreover, push for Air India sale would be further relaxing the FDI rules to attract foreign airlines such as Singapore Airlines, Emirates and Qatar Airways. The present rule which caps maximum investment by a foreign airline in domestic carriers at 49 per cent is considered one of the key reasons for failed disinvestment bid last year.
Last year, the government set the ball rolling for Air India’s disinvestment offering 76 per cent equity stake to private parties. However, the plan proved to be a damp squib with not a single private company turning up to submit EoI. This forced the government to put off the sale process.
(With IANS inputs)