Centre Settles Over Rs 61,000 Crore Air India Debt Before Transfer To Tatas

The government has settled over Rs 61,000 crore of Air India's legacy debt and other liabilities that were left in AIAHL -- the company holding residual assets and liabilities of the airline -- ahead of the transfer of the national carrier to the Tata Group, a top official said on Thursday..The airline had a total debt of Rs 61,562 crore as of August 31, 2021. Of this, the Tata Group took over Rs 15,300 crore and the rest 75 per cent or around Rs 46,000 crore was transferred to a special purpose vehicle, AI Asset Holding Ltd (AIAHL)..AIAHL also held Air India's non-core assets such as stake in Hotel Corp of India (HCIL), paintings and artifacts and immovable properties..In an interview with PTI, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) -- which ran the Air India privatisation process -- said Parliament had last month given nod for spending of Rs 62,057 crore towards equity infusion in AIAHL for repayment of dues and liabilities of Air India..Of this, broadly about Rs 61,131 crore has been used to repay the entire debt and other liabilities such as fuel dues to oil companies, he said.."The interest outgo on the debt and other liabilities was very high and it was decided to square off the debt now." As of August 31, 2021, the airline's total debt stood at Rs 61,562 crore, out of which around Rs 46,000 crore was transferred to AIAHL. The airline also had about Rs 15,000 crore excess liabilities towards unpaid fuel bills and other operational creditors..So the debt and liabilities with the government was around Rs 61,000 crore. "Both excess debt and excess current liabilities whatever was remaining with the government, about Rs 61,131 crore, have been cleared," Pandey said.."Whatever was to be borne by the government that the government has squared off rather than paying it off later... we found that it is carrying higher rate of interest. It wasn't worthwhile to retain it and pay it off later.."If we take it to AIAHL and pay it later we have to pay higher rate of interest. So we have chosen to square it off straight away," he said..Tata Group was in October last year announced as the winning bidder for Air India with a bid amount of Rs 18,000 crore. Tatas have paid Rs 2,700 crore cash and taken over Rs 15,300 crore of the airline's debt. The deal also includes sale of Air India Express and ground handling arm AISATS..Tata Group has already refinanced its Rs 15,300 crore debt in Air India and brought in new lenders..Tatas beat the Rs 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier..(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Centre Settles Over Rs 61,000 Crore Air India Debt Before Transfer To Tatas

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