Cabinet approves setting up of SPV for disinvestment of Air India

The Union Cabinet headed by Prime Minister Narendra Modi has given ex-post facto approval for the creation of the Special Purpose Vehicle (SPV) and associated activities for the disinvestment of Air India and its subsidiaries/JV.

Air India Assets Holding Ltd.

• Debt of Air India Ltd. amounting to Rs. 29,464 crore would be transferred to Air India Assets Holding Ltd.
• The subsidiaries which are not part of Air India strategic disinvestment viz. Air India Air Transport Services Ltd. (AIATSL), Airline Allied Services Ltd. (AASL), Air India Engineering Services Ltd. (AIESL) and Hotel Corporation of India Ltd. (HCI) would be shifted to the special purpose vehicle.
• Non-core assets, painting and artefacts and other non-operational assets of Air India Ltd would also be transferred to the SPV.
• The board of directors of the SPV includes Director Finance as well as the chairman and managing director of Air India along with joint secretaries of Corporate Affairs, Investment and Public Asset Management, Expenditure, Economic Affairs.

The disinvestment proceeds from the Air India would be utilized to set off the working capital loan liability of Air India which are not backed by any asset and warehoused in the same SPV.

Month: Current Affairs - March, 2019