Govt likely sell part of Air India stake to foreign airline; may invite preliminary bids by 10 October: Report
The government has moved about Rs 30,000 crore of Air India's debt to a separate holding company, leaving the carrier with roughly another Rs 30,000 crore of debt.
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The government has moved about Rs 30,000 crore of Air India's debt to a separate holding company
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The finance ministry is unlikely to infuse any additional funds into the debt-laden airline this financial year
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AIAHL is expected to come out with its second bond offering worth Rs 15,000 crore in the next 10 to 12 days
The government is open to selling a partial stake in debt-laden state-run carrier Air India to a foreign airline, people familiar with the matter said on Wednesday.
The government has moved about Rs 30,000 crore ($4.21 billion) of Air India's debt to a separate holding company, leaving the carrier with roughly another Rs 30,000 crore of debt, said a Reuters report quoting sources.
The government will also likely invite preliminary bids for the carrier by 10 October, the sources added.
Representational image. PTI
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In a major set back for the debt-laden Air India, the finance ministry is unlikely to infuse any additional funds into the debt-laden airline this financial year amid a report that the government may come out with a fresh disinvestment plan for the national carrier.
Accordingly, Rs 2,600 crore will be utilised to pay off the interest on bonds raised by Air India Assets Holdings Ltd (AIAHL).
AIAHL is expected to come out with its second bond offering worth Rs 15,000 crore in the next 10 to 12 days, according to a senior official.
AIAHL—the special purpose vehicle of Air India—mopped up Rs 7,000 crore through bonds on Monday and the issue was oversubscribed more than 20 times.
A total of Rs 22,000 crore is to be raised by sale of bonds by AIAHL and the proceeds would be used to repay the national carrier's debt, which is estimated to be over Rs 58,000 crore.
The official said AIAHL would issue bonds, guaranteed by the government, to the tune of Rs 15,000 crore in September.
The bonds, having a ten-year tenure, are expected to be issued in the next 10-12 days. State-owned LIC and EPFO are likely to be among the bidders, the official added.
On Monday, Air India said AIAHL's bond issue with a three-year tenure of Rs 1,000 crore with a green-shoe option of Rs 6,000 crore was fully subscribed at 6.99 percent.
— With inputs from agencies
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