Hyderabad: The government, which wants to complete the sale within the announced timeline, will split part of the $8.5 billion debt ahead of divesting the national airlines, the junior civil minister said on Friday.
Speaking to news agency Reuters on the sidelines of an event in Mumbai, Jayant Sinha said that the Centre has decided to split the massive debt into sustainable and unsustainable debt. “The unsustainable part will be with the special purpose vehicle.”
While Mr Sinha didn’t elaborate, Reuters, qouting a Bloomberg report, said that the Centre had proposed the transfer of non aviation assets and upto Rs 30,000 crore in short term loans into a seperate firm.
In a busy day for Mr Sinha, who also made a stop by in Hyderabad for Wings India, said, “To issue the EoIs, we need to get approval from the alternate mechanism that is chaired by the finance minister. That is a process we are going through. As soon as we have the go ahead, we will issue it.” The civil aviaition secretary, on Thursday, had said that the Centre plans to issue expression of interests for Air India within two weeks.
When asked about the timeline, Mr Sinha added, “Our timeline is very clear. We want the whole transaction closed and done including the transfer to the partner airline in this calender year. Those are the timelines that have been established and will be maintained.” In 2017, the Cabinet finally gave the go-ahead to privatise the airline after multiple attempts to keep it solvent. But its debt burden and bloated cost structure have been a concern.