Prepare FY19 financials by June as PMO wants quick disinvestment: Govt tells Air India

In a bid to speed up the divestment process national carrier Air India, the government has asked the airline to make 2018-19 financials for itself and its subsidiaries by the end of June.

The government attempted to sell the debt-laden carrier in May last year but failed. In June, a committee led by Finance minister Arun Jaitley decided to scrap the stake-sale plan for the time being.

Subsequently, the government decided to carry out additional fund infusion into the airline and pare debt by raising resources by selling land assets and other subsidiaries. Air India has a debt burden of around Rs 55,000 crore.

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On April 1 this year, Nripendra Misra, the principal secretary to the prime minister held a meeting to discuss the matter regarding strategic disinvestment of Air India and its subsidiaries.

"A meeting was held on April 1 under the chairmanship of the Principal Secretary to PM in which it was, inter-alia, decided to speed up the process of disinvestment of AIATSL, AIESL and AASL," civil aviation secretary Pradeep Singh Kharola told Air India's Chairman and Managing Director (CMD) Ashwani Lohani in a letter dated May 6. Air India Air Transport Services Limited (AIATSL), Air India Engineering Services Limited (AIESL) and Airline Allied Services Limited (AASL) are subsidiaries of the national carrier. In order to proceed with disinvestment process of Air India and its subsidiaries, audited financials for 2018-19 will be required, Kharola told Lohani.

"I would, therefore, request you to kindly get financials of Air India and its subsidiaries for the financial year 2018-19 finalised by end of June," Kharola said.

Aviation secretary Kharola also said the accounts for 2018-19 should be prepared with "utmost caution to reflect the correct financial status" of the airline. They would form the "basis of bidding". Contingent liabilities must be thoroughly verified. Moreover, Kharola added that "account receivables" and "account payables" must be verified and confirmed from the other parties.

"A physical verification of the inventories need to be done so as to ensure that the value of inventories shown on the balance sheet matches with the assets physically," Kharola told Lohani.

The secretary also asked Air India CMD to prepare a list of all pending litigations. Ahead of sale of Air India, the Cabinet on February 28 had cleared setting up of a special purpose vehicle (SPV)-Air India Assets Holding Limited-to transfer Rs 29,464 crore worth loans of the national carrier and its four subsidiaries.

The four subsidiaries which have been transferred to the SPV are AIATSL, AASL, AIESL and Hotel Corporation of India (HCI). 

Edited by Aseem Thapliyal

With PTI inputs