Air India’s debt to be split: Min
The government, which wants to complete the sale within the announced timeline, will split part of the $ 8.5 billion debt ahead of divesting the national airlines, the junior civil minister said.
Speaking to news agency Reuters on the sidelines of an event in Mumbai, Jayant Sinha said that the Centre has decided to split the massive debt into sustainable and unsustainable debt. “The unsustainable part will be with the special purpose vehicle.”
While Mr Sinha didn’t elaborate, Reuters qouting a Bloomberg report said that the Centre had proposed the transfer of non aviation assets and upto ` 30,000 crore in short term loans into a seperate firm.
In a busy day for Mr Sinha, who also made a stop by in Hyderabad for the Wings India exhibition, in an impromptu conference said, “To issue the EoIs, we need to get approval from the alternate mechanism that is chaired by the finance minister. That is a process we are going through. As soon as we have the go ahead, we will issue it.”
The civil aviaition secretary, on Thursday, had said that the Centre plans to issue expression of interests for Air India within two weeks.
When asked about the timeline, Mr Sinha added, “Our timeline is very clear. We want the whole transaction closed and done including the transfer to the partner airline in this calender year. Those are the timelines that have been established and will be maintained.”
In 2017, the Cabinet finally gave the go- ahead to privatise the airline after multiple attempts to keep it solvent. But its debt burden and bloated cost structure have been a concern.
In an unrelated development, Mr Sinha remained evasive on whether there are any plans to ground these planes that are powered by P& W engines.
With repeated instances of A320 neo planes facing problems with Pratt & Whitney engines, Mr Sinha said authorities are working on the best course of action, “Safety is our number one priority and we have been working very closely with safety regulators around the world to decide the best course of action for the P& W neo engine.”
He was responding to a question on whether there are plans to ground the entire A320 neo planes with P& W engines till the problems are addressed.
Mr Sinha noted that the Centre has put in place appropriate safety measures for P& W engines which are consistent with practices followed around the world.