The Indian Government’s cabinet has approved the setting up of a special purpose vehicle (SPV) – named Air India Assets Holding Ltd (AIAHL) – which will see debt and four subsidiaries moved across including the ground handling arm Air India Air Transport Services Ltd (AIATSL).
AIAHL will also see INR294.6 billion (US$4.2 billion) of Air India’s working capital debt transferred, and three other subsidiaries, including Airline Allied Services Ltd, Air India Engineering Services Ltd and Hotel Corporation of India Ltd; and non core Air India assets, including paintings and other artifacts.
The ground handling arm AIATSL garnered interest before the failed privatisation of Air India last year, receiving several expressions of interest from companies keen to buy the company. Indian firms Bird Group and Livewel Aviation, as well as Turkish company Celebi Aviation Holding were reportedly among those keen.
The four subsidiaries will be sold off, with proceeds to be used to repay the debt held by AIAHL. The SPV was incorporated by the Ministry of Civil Aviation (MoCA) on 22 January 2018.
The setting up of AIAHL is the latest move to rescue cash-strapped Air India which has run up huge debts and the Indian Government continues to bail it out with funding.