The Indian government will sell its 100 per cent stake in Air India’s ground handling subsidiary Air India Air Transport Services Ltd (AIATSL) to reduce some of the carrier’s debt, according to reports.
The Business Standard reports an inter-ministerial panel, Air India Specific Alternate Mechanism, decided on Tuesday (27 November) to divest the stake.
A panel headed by Finance Minister Arun Jaitley, reportedly believes it will raise a significant amount from AIATSL which will then be used to pay-off a chunk of the national carrier’s accumulated debt which is thought to total Rs 48,000 crore.
AIATSL will be transferred to a SPV (special purpose vehicle) and an EoI (Expression of Interest) document for the subsidiary will be issued after its transfer to the SPV, the publication reports.
In 2016-17 AIATSL earned a profit before tax of Rs 61.66 crore and provides ground handling services at most airports in India.
The Indian government owns 100 per cent of Air India and had previously offered to sell a 76 per cent stake in the cash-strapped carrier, but it attracted no bidders.