Following the privatisation of Air India (AI), the Government of India (GoI) started its asset disposal programme for disposal of assets and liabilities of the subsidiaries of AI.
- Air India Asset Holdings Pvt Ltd (AIAHL), the wholly-owned regional subsidiary of AI consists of a company of ground handling, engineering, and Alliance Air to be privatised for clearing its assets.
- The details of privatisation were provided by Tuhin Kanta Pandey, the secretary of the Department of Investment and Public Asset Management (DIPAM).
Background:
i.Recently, Talace Pvt Ltd (the subsidiary of Tata Sons Private Ltd) won the final bid for acquiring the national carrier AI by submitting Rs 18,000 crore bid.
ii.The bid includes a 100 percent stake in AI and Air India Express and a 50 percent stake in ground-handling firm AISATS (Air India SATS Airport Services Private Limited).
iii.SPV of Air India:
- In 2019, GoI has formed a Special Purpose Vehicle (SPV) AIAHL for holding debt and non-core assets of the Air India group.
- The 4 subsidiaries of Air India including Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL), Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI) along with non-core assets, painting and artefacts, and other non-operational assets, were transferred to AIAHL.
Key Points:
i.Debt Take over: As of August 2021, AI has a total dept of around Rs 61,562 crore, in which Talace Pvt Ltd (the subsidiary of Tata Sons Private Ltd) will take over Rs 15,300 crore and the remaining Rs 46,262 crore will be transferred to SPV AIAHL.
ii.The non-core assets of AI including land and building, valued at Rs 14,718 crore and liabilities of Rs 15,834 crore towards dues to operational creditors, and for fuel purchases (as of August 31, 2021) would be transferred to SPV AIAHL.
iii.Alliance Air operates a fleet of 19 ATR planes that connect 48 destinations and made an operating profit of Rs 65.09 crore and a net loss of Rs 201 crore in FY20.
iv.The Air India brand and eight logos too would be transferred to the Tata Sons but it will have a 5-year lock-in and with the clause that they cannot sell them to a foreign entity.
Note – The terms of the disinvestment allow Tata to merge and sell up to 49 percent stake of AI after one year.
Recent Related News:
In May 2021, The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi gave approval for strategic disinvestment and transfer of management control in the Industrial Development Bank of India (IDBI Bank).
