A ministerial panel on Tuesday cleared a proposal for strategic sale of Air India's ground handling subsidiary AIATSL, an official said. The approval comes amid the government working on ways to revive the fortunes of Air India -- estimated to have debt burden of more than Rs 50,000 crore --, including sale of non-core assets.
"The Alternative Mechanism has approved EoI (Expression of Interest) together with Preliminary Information Memorandum for Air India Air Transport Services Limited (AIATSL) sale, an official told reporters.
The panel has also decided to go ahead with Pawan Hans sale for which a request for proposals has already been floated. The panel expects to complete the stake sale in this fiscal.
Proceeds from the sale of AIATSL would be used to pay-off part of Air India's debt. The Alternative Mechanism on Air India disinvestment, headed by finance minister Arun Jaitley, has decided to proceed with strategic sale through divestment of 100 percent ownership of AIATSL, the official added.
The meeting was attended by Jaitley and civil aviation minister Suresh Prabhu, among others.
The sale would happen after transferring AIATSL to a Special Purpose Vehicle (SPV), which has already been incorporated, the official said. The EoI document would be issued after transfer of AIATSL to the SPV.
In 2016-17, AIATSL raked in a profit of Rs 61.66 crore. AIATSL was incorporated in June 2003 with the objective of carrying out the business of providing all types of services at airports. Industrial and business operations of AIATSL include rendering airport ground handling services such as those pertaining to passenger, ramp, security and cargo for Air India.
The latest strategic sale plan follows the decision by the ministerial panel in June to make Air India competitive, by way of cutting down debt and raising resources by selling land assets and other subsidiaries.
The ministerial grouping had decided to revive Air India after the government's strategic stake sale offer failed to attract any bidders earlier this year.
The government had originally proposed to offload 76 percent stake in the national carrier as well as transfer the management control to private players.