Air India's total debt rises to nearly 43,000 crore

In Feb 2021, the civil aviation ministry had informed Rajya Sabha the total debt of national carrier Air India as per provisional figures of 2019-20 (Apr-Mar) was Rs 38,366.39 crore after transfer of debt amounting to Rs 22,064 crore to the SPV.

The divestment of the debt-laden national carrier is currently underway and the deadline for submission of financial bids ends on September 15.

In January 2020, the government had invited bids for strategic disinvestment of 100 percent stake of the Government of India in the airline. It also includes along with 100 percent stake in Air India Express Ltd and a 50 percent stake in Air India SATS. Due to the COVID-19 pandemic, the last date for submission of preliminary bids was extended from time to time.

While multiple bids were received by the transaction advisor in the preliminary round, the outcome of the second round is expected to be known by next week.

“Air India has movable as well as immovable assets. With the disinvestment of Air India Limited, the movable assets are proposed to be transferred to the new owner of Air India. Immovable assets are being monetised by Air India to offset the debt of Air India Limited,” the civil aviation ministry has informed Lok Sabha on the matter.

“The total Net Fixed Assets of Air India Ltd. as on 31.03.2020 (provisional) are Rs. 45,863.27 crore. These include land and buildings, aircraft fleet and engines, other fixed assets, Right of Use assets and assets and intangible assets. The enterprise value set for bidding has not been determined so far,” the civil aviation ministry has further informed Lok Sabha in a separate reply.

The airline posted a net loss of Rs 3836.78 crore in FY16, Rs 6,452.89 crore in FY17, Rs 5,348.18 crore in FY18, Rs 8,556.35 crore in FY19 and Rs 7,982.83 crore in FY20 as per provisional figures.

While there was no equity infusion by the union government into Air India during FY 2020-21, government Guarantee support of Rs 964 crore has been provided to Air India which has helped it to raise new working capital loans from Indian banks. Further, Government has also extended the existing Guarantee of Rs 6693 crore for working capital requirements and $819 million for refinancing of aircraft bridge loans. National Small Saving Fund (NSSF) loan of Rs 4500 crore has also been provided to Air India in FY 2020-21.

Under the turnaround plan approved for Air India, the airline has received a total equity infusion of Rs 30,520.21 crore from FY 2011-12 till Dec 2019, the civil aviation ministry had informed Lok Sabha in 2019.

Out of this, during FY 2019-20, FY 2018-19 and FY 2017-18, the equity infusion provided by the government to Air India Ltd was Rs 0.01 crore, Rs 3975 crore and Rs 1800 crore respectively.