Govt plans Air India debt rejig to woo buyers

New owner may have to absorb only a small part of loans

The government is looking to leverage Air India’s assets to lighten the debt burden of the company to make it attractive to potential buyers. However, the new owner of Air India may need to absorb around Rs 6,000 crore of the working capital debt, internal calculations have shown.

Plans have been firmed up to transfer the company’s working capital debt to a separate shell company, and use the proceeds from sale of profit-making subsidiaries and real estate properties to clear the debt. Air India’s debt at the end of 2016-17 stood at Rs 48,876 crore, of which Rs 31,517 crore