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Cabinet approves setting up of SPV for disinvestment of Air India and its Subsidiaries/JV
01-Mar-19   13:14 Hrs IST
The Union Cabinet chaired by Prime Minister Narendra Modi has given ex-post facto approval for the creation of the Special Purpose Vehicle (SPV) and associated activities for the disinvestment of Air India and its subsidiaries/JV.

An SPV namely Air India Assets Holding (AIAHL) has been created for warehousing accumulated working Capital Loan not backed by any asset along with four Subsidiaries (Air India Air Transport Services (AIATSL), Airline Allied Services (AASL), Air India Engineering Services (AIESL) and Hotel Corporation of India (HCI), non-core assets painting and arte facts and other non-operational assets of Air India to an SPV.

Ministry of Civil Aviation (MoCA) issued order for creation of a new SPV. The SPV, Air India Assets Holding was incorporated on 22 January 2018. The Board of Directors of SPV includes CMD, Air India and Joint Secretaries of MoCA, Deptt. of Expenditure, Deptt. of Economic Affairs, DIPAM and Director(Finance) Air India.

As on date, one subsidiary, namely AIATSL has been transferred to AIAHL, as per the Share Purchase Agreement between Air India and AIAHL subject to conditions precedents which include lenders' approval.

Preliminary Information Memorandum (PIM) for disinvestment of AIATSL has been issued on 12 February 2019 by AIATSL with last date of submission of Expression of Interest (EOI) on 26 March 2019.

The Government has decided to transfer following to the newly-created SPV:

* Debt of Air India amounting to Rs 29464 crore;

* The subsidiaries which are not part of Air India strategic disinvestment viz. AIATSL, AIESL, AASL are to be shifted to the SPV; and

* Non-core assets, painting and artifacts and other non-operational assets of Air India.

The approval will ease warehousing of Air India's subsidiary companies approval namely, AIATSL, AIESL, AASL and HCI from Air India to the newly created SPV company. The disinvestment proceeds will be utilized to set off the working capital loan liability of Air India not backed by any asset also warehoused in the same SPV.

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