Govt plans to complete sale of Air India subsidiary by March
New Delhi: The government plans to complete the sale of Air India ground handling subsidiary AIATSL by March 2019, an official said.
Air India is reeling under a huge debt burden of over Rs 50,000 crore and the government is planning to sell its non-core subsidiaries of the national carrier.
"We are looking to conclude strategic sale of Air India Air Transport Services Limited (AIATSL) in current fiscal. We will soon invite bids from merchant bankers for managing the sale process," the official told PTI.
The sale proceeds would add up to the government's disinvestment kitty. The government has so far has raised over Rs 15,200 crore from CPSE stake sale in current fiscal as against the budgeted target of Rs 80,000 crore.
The government is launching a follow on public offer of CPSE Exchange Traded Fund (ETF) on November 27, targeting to raise up to Rs 14,000 crore.
As part of its plans to take forward the strategic sale of non-core assets of CPSEs, the Department of Investment and Public Asset Management (DIPAM) has already identified assets of loss making Air India which are to be hived off.
As per latest data, in 2016-17, two subsidiaries of Air India - AIATSL and Air India Express Ltd - posted profits.
While AIATSL earned Rs 61.66 crore profit in financial year 2016-17, another subsidiary AI Express earned profit of Rs 297 crore.
Some of the other subsidiaries of Air India include Air India Charters Ltd, IAL Airport Services Ltd, Airline Allied Services Ltd, Air India Engineering Services Ltd and Hotel Corporation of India Ltd.
Besides, catering services provider AISATS - a 50:50 joint venture between Air India and SATS Ltd - too posted profit of Rs 66.06 crore in 2016-17.
Under the administrative control of Ministry of Civil Aviation, AIATSL is 100 per cent subsidiary of Air India and was incorporated in June 2003 with the objective of carrying on the business of providing all types of services at airport.
Industrial / Business operations of AIATSL include rendering airport ground handling services, including passenger, ramp, security and cargo handling for Air India.
The strategic sale plan follows the decision by Finance Minister Arun Jaitley led ministerial panel in June to make Air India competitive, by way of cutting down debt and raising resources by selling land assets and other subsidiaries.
The Group of Ministers (GoM) had decided to revive Air India after the government's offer to sale 76 per cent stake in the airline failed to attract any bidder earlier this year.
The government had originally proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players.
However, the stake sale failed to attract any bidders when the bidding process got completed on May 31. In June, the GoM then decided not to go ahead with Air India stake sale in an election year.