Air India Privatisation: Excess Liabilities Worth Over Rs 15000 Crore To Be Transferred To Asset Holding Company


Excess liabilities worth Rs 15834 crore of Air India will be transferred to the Air India Asset Holding Company Ltd.

These liabilities include several unpaid bills of airport operators, oil companies and other vendors that the erstwhile national carrier had managed to avoid paying by the virtue of being a wholly government owned company thus far.

“The sale will not just stop the hit that the government has to take on a daily basis but also help clean up the system and release fund,” an official from the government was quoted in a report by the Times of India (TOI).

The new entity will be reportedly taking over the liabilities that include both paid and unpaid bills. However, it will manage to monetise the assets only in the coming few years depending upon the prevailing market conditions.

It will in the meantime try and work around some arrangements with banks and other creditors to tweak the terms of these loans. The government maintains that this would not be an issue given that it has already guaranteed 94 per cent of the loans that have been used to keep Air India afloat.

Moreover, the transaction’s terms make the government the bearer of the financial impact of the operations of Air India until the company is transferred to its new owner by December-end.