Beleaguered Air India is reportedly planning to sell some of its highly valued and prime real estate holdings in the country. The nationally owned airline carrier is targeting to raise an amount of around Rs. 500 crore as per reports. Air India is considering the sale of prime properties like land that it owns in Chennai and also a few plots located in Pali Hill, Mumbai, where there are 14 houses. It is also considering the sale of its 4 acre land parcel situated in the posh residential zone of Baba Kharak Singh Marg in Delhi’s Vasant Vihar.
This new development may be of interest to leading real estate developers looking to snap up prime plots and properties for future development purposes. Some of the properties will be sold independently by Air India while the Central Government will be selling several other properties that Air India obtained on lease from the Government as per the latest reports.
The Government is already involved in the identification of several properties under the name of Air India which come with long-term leases from the Central Government. Reports have stated that Air India has already managed to come up with Rs. 445 crore through the sale of land ever since the year 2012 when the Government had given the company a target to mop up Rs. 5, 000 crore over a span of 10 years through the sale of real estate.
However, Air India has been facing problems in meeting the targets of the Government due to several issues linked to the title deeds. Many of these issues have now been resolved ahead of a possible sale of Air India in the 2018-19 period and several private organizations have already displayed their interest in the airline carrier’s prime realty assets. The approval of the Union Cabinet will be required by Air India for selling land to private companies. This will not be required in case land is sold to public sector companies.
An SPV (special purpose vehicle) will be made by the Central Government especially for Air India. This will help in accommodating the massive working capital debt of close to Rs. 35, 000 crore and some real estate and land based assets. The Government is targeting divestment of its stake in Air India by December, 2018, as per reports.
