Modi mulls privatising debt-laden Air India
NEW DELHI: Prime Minister Narendra Modi is considering a proposal to privatise state-run Air India Ltd, possibly asking the buyer to absorb loans of about 200 billion rupees (RM13.3 billion) linked to aircraft purchases, said a person with direct knowledge of the matter.
The deliberations followed recommendations by a government panel for the sale of the moneylosing carrier that has nearly US$8 billion (RM34.22 billion) in debt, said the person.
As for the rest of the flag carrier’s debt, the government had yet to decide whether to write off or reorganise it, said the person.
The process might include disposing of Air India’s real-estate and other non-core assets worth about US$3 billion before the sale or hiving them off, said the person.
Unprofitable for a decade with taxpayers bailing it out in the past six years, Air India’s appeal to any investor is contingent on the government’s ability to write off the debt not backed by assets.
That is a political call Modi needs to take at a time when many of the nation’s staterun lenders have been seeking capital injection from taxpayer funds amid mounting bad loans.
Niti Aayog, the government’s top policy planning body, had suggested options for the future of Air India and the government was open to all of them, said Civil Aviation Minister Ashok Gajapathi Raju on Tuesday, declining to elaborate on what the options were. Bloomberg