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Air India Board of Directors to take a call on asset sale in July

Air India is currently trying to raise money by selling land assets after a failed attempt in 2018 by the government to disinvest the loss-making carrier
New Delhi: The meeting of the board of directors of debt-ridden Air India that is scheduled to take place in July will discuss the plan to sell the national carrier’s properties across the country and transfer non-operational assets to a government-approved special purpose vehicle (SPV), two senior officials were quoted as saying.

Legal issues sorted

According to a report in The Mint, the sources said, “We missed the target of Rs 500 crore that was to be raised through the sale of land assets in FY19. During FY20, we have a similar target and we are hoping to achieve it this time.” A lot of properties that were mired in legal issues earlier and could not be put up on sale have now got clearance. “Almost all title deeds for our real estate meant to be put on the block are in place,” one of the sources was quoted as saying.

The past precedent

Air India is currently trying to raise money by selling land assets after a failed attempt in 2018 by the government to disinvest the loss-making carrier. However, in April, when Air India had put up around 56 properties — mostly residential units in cities such as Mumbai, Delhi, Pune, Bengaluru, Chennai and Kolkata — for sale, it had managed to sell only 10. The reserve price of these units ranged from Rs 16 lakh to about Rs 8 crore.

Difficulties ahead

The report quoted a real estate expert as saying that the airline may face difficulty while finding buyers for assets at the existing reserve prices, especially in bigger cities, because of a slowdown in the property market. But another official source said that the reserve prices of some of the properties is higher than their market price. “It is up to the board (of directors) and MSTC to decide whether to bring down the reserve price of the properties that didn’t find any takers during the next round of auctions,” the official said. State-owned MSTC, which specializes in conducting e-auctions, has been roped in by Air India to sell its assets.