Govt to clear Rs 16,000 crore bills of Air India

Pandey also added that the government would continue to support the airline’s operations by giving Rs 20 crore required daily to maintain it as a going concern.
Image of Air India flight used for representation. (File Photo)
Image of Air India flight used for representation. (File Photo)

NEW DELHI:  The government on Monday issued Letter of Intent to Air India and clarified that it would clear about Rs 16,000 crore of unpaid fuel bills and other dues that Air India owes to suppliers and vendors before handing over the loss-making airline to the Tata Group.

“LoI issued to the successful bidder in the strategic disinvestment transaction of AI. share-purchase agreement will be signed soon,” Tuhin Kanta Pandey, Secretary to the Department of Investment and Public Asset Management — the department running the privatization programme — said in a tweet on Monday.

According to the divestment secretary, the government will transfer about Rs 16,000 crore of unpaid fuel bills and other dues that Air India owes to suppliers, to Air India Assets Holding Ltd (AIAHL), which will hold non-core assets of Air India such as land and building. AIAHL will also hold rest 75% of the airline’s debt that the Tata Group is not taking over.

Pandey also added that the government would continue to support the airline’s operations by giving Rs 20 crore required daily to maintain it as a going concern. Also before the handover of the airline to Tatas, the government would again work on the balance sheet of Air India for the remaining 4-month period (Sept-Dec) and whatever liabilities arise would be transferred to AIAHL.

As on August 31, Air India had a total debt of Rs 61,562 crore. Of this, Tata Sons holding company Talace Pvt Ltd will take over Rs 15,300 crore and the remaining Rs 46,262 crore will be transferred to AIAHL.
Besides, non-core assets including land and building, valued at Rs 14,718 crore are being transferred to AIAHL. After adjusting for all the dues to lenders and operational creditors and also the assets of AIAHL, the net liabilities with AIAHL as of August 31 is Rs 44,679 crore.

As part of deal with Tata Group
Besides the unpaid bills of Rs 16,000 crore, the govt would continue to support the airline’s operations by giving Rs 20 crore required daily to maintain it as a going concern

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