NEW DELHI: Paving the way for Air India’s divestment by the next government, the Union Cabinet Thursday cleared the creation of a special purpose vehicle (SPV) to which Rs 29,464 crore of AI’s debt will be transferred to along with some assets of the airline. A government statement said the AI will transfer its subsidiaries to the SPV — AI Air Transport Services Ltd (AIATSL), AI Engineering Services Ltd (AIESL) and Airline Allied Services Ltd (AASL)— along with the airline’s non-core and non-operational assets, paintings and artefacts.
The plan is that the SPV will sell off these assets and write off the acquired loan. AI has a loan of over Rs 55,000 crore. Transferring half of the loan will reduce AI’s debt servicing.
The airline’s current annual debt servicing is about Rs 4,500 crore and transferring the debt will mean significant relief to AI.
