Categories: International

Air India Announces Plans to Sell Property and Land

According to an article in business-standard.com, Air India is planning to sell land and property located across the country. Apparently, the plan is to sell airport locations and airline offices and other real estate assets in cities which are situated in prime locations but which aren’t considered to be caught assets.

A consultant is to provide a detailed inventory and valuations of the land and property in question. The sales process is to be reviewed by a committee which includes officials from the finance ministry and the civil aviation ministry as well as a retired judge and officials from Air India.

Air India has a huge amount of property located in India and overseas. Some of these properties have been unused for a long time while others are in locations where the airline no longer s. The plan is to sell the property to help reduce the airline’s debt levels. Currently the airline has a total debt of RS 46,570 crore. Out of this total RS 16,000 crore is still due to aircraft loans. These aircraft loans are guaranteed by the government while the remaining debt is a working capital loan raised from a consortium of 25 banks, and the consortium is led by the State Bank of India.

This isn’t the first time the company has decided to sell property as a previous plan was approved in 2012. In spite of Air India’s privatization plan, the government may not lose control over the airline and could instead decide to do a debt equity swap with lenders combined with sales of non-core assets and they may appoint professionals to run the airline.

Over the past couple of years Air India’s performance has been good but the airline has been constrained by debt problems. Selling off some of its non-core assets would help relieve some of the debt burden. It is anticipated the sale of the assets could generate more than RS 10,000 crore.

Photo Credit Air India

Allison Halliday

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.

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