On February 1, the Government issued an amount of Rs. 51,971 crore in order to settle the debt of Air India.
Amount issued by Government to clear Air India’s debt:
Out of the total issued amount the government has allocated Rs. 9,259 crore to Air India Assets Holding Ltd (AIAHL), a government-owned special purpose vehicle set up to handle Air India’s debt and non-core assets, for the next financial year starting from April 1. Air India Assets Holding Limited (AIAHL) was set up in 2019.
Revised capital expenditure:
“The provision (of Rs 9,259 crore) is kept for servicing of loans transferred to special purpose vehicles as a result of financial restructuring of Air India,” the Budget document said. In the budget speech on February 1, Finance Minister Nirmala Sitharaman said the revised estimate of capital expenditure for this fiscal is Rs 6.03 lakh crore. This includes an amount of Rs 51,971 crore towards settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments, she added.
According to the revised estimates of 2021-22, the SPV, AI Asset Holding Limited, has received Rs. 62,057 crore, of which Rs. 36,254 crore was infused as equity for repayment of past government-guaranteed borrowings of Air India; Rs. 12,357 crore for repayment of borrowings for sale and leaseback rentals for aircraft; and Rs. 13,446 crore for repayment of other dues and liabilities. According to the budget document, the government infused Rs. 36,254 crore in AIAHL during 2021-22 “for repayment of past government-guaranteed borrowings of Air India Limited”.
Air India sold to Talace:
The nation was taken over by Tata Group firm Talace Pvt. Ltd. on January 27. Through a competitive bidding process, the government sold loss-making Air India to Talace for Rs 18,000 crore.
As part of the deal, Talace paid Rs. 2,700 crore in cash and took over Rs. 15,300 crore debt of the airline. The remaining debt and borrowings of Air India were transferred to AIAHL.
As per August 31, 2021, Air India had a total debt of Rs 61,562 crore. The airline also had about Rs 15,000 crore excess liabilities towards unpaid fuel bills and other operational creditors. Meanwhile, in the budget, the civil aviation ministry has been allocated an amount of Rs 10,667 crore for the next fiscal.
