Govt settled Air India's Rs 61,000 cr debt before transfer to Tatas
New Delhi: The Centre has settled more than Rs 61,000 crore of Air India's legacy debt and other liabilities that were left in Air India Assets Holding Limited (AIAHL) -- before the transfer of the national carrier to the Tata Group, media reports said.
AIAHL is the company that held residual assets and liabilities of Air India.
As of August 31, 2021, Air India had a total debt of Rs 61,562 crore, of which Rs 15,300 crore was taken over by the Tata Group while the remaining Rs 46,000 crore was transferred to a special purpose vehicle, AI Asset Holding Ltd (AIAHL).
AIAHL also held Air India's non-core assets such as a stake in Hotel Corp of India (HCIL), paintings and artifacts, and immovable properties.
Finance Minister Nirmala Sitharaman tabled the supplementary demands for grants for 2021-22 in the Rajya Sabha.
As per the document, Rs 62,057 crore would be given to the Civil Aviation Ministry for equity infusion in Air India Assets Holding Company (AIAHL) for repayment of past government guaranteed borrowing and past dues/liabilities of Air India.
Out of this, around Rs 46,000 crore was transferred to AIAHL. The airline also had about Rs 15,000 crore excess liabilities towards fuel dues and other operational creditors.
Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) told news agency PTI: "Both excess debt and excess current liabilities whatever was remaining with the government, about Rs 61,131 crore, have been cleared.
"Whatever was to be borne by the government that the government has squared off rather than paying it off later... we found that it is carrying a higher rate of interest. It wasn't worthwhile to retain it and pay it off later.
"If we take it to AIAHL and pay it later we have to pay a higher rate of interest. So we have chosen to square it off straight away."
Tata Group was announced the winning bidder for Air India in October last year amount.
The salt-to-software conglomerate paid Rs 18,000 crore as part of the deal, of which Rs 2,700 crore was paid in cash and Rs 15,300 crore to repay the airline's debt.