The board of national carrier Air India (AI) has decided to put on hold its plan to sell properties to raise money for the cash-starved carrier till market sentiment improves.
The state-owned airline is also facing a problem tracing lease agreements of some prime properties owned by it, without which, these properties cannot be disposed of.
The sale is a part of the financial restructuring plan of the airline. The bleeding carrier plans to raise over Rs. 5,000 crore through sale of its properties across the globe by 2016 — five years ahead of the target set by a government panel that framed the airline’s turnaround plan.
Sale or commercial redevelopment of three prime properties owned by AI is stuck as either the lease agreement is not available or memorandum of agreement with the concerned authorities needs to be reworked.
The three properties include a plot in Baba Kharak Singh Marg in Delhi, whose sale is expected to fetch at least Rs. 800 crore; redevelopment and commercial exploitation of land in Vasant Vihar area of the Capital, which could help raise Rs. 2,000 crore and a property in Nerul, Navi Mumbai, which is expected fetch Rs. 1,300 crore to the airline.
“We are hopeful that these problems would be sorted out soon,” a senior AI official said. “But, we won’t go for a distress sale. Our real estate consultant has also advised that this isn’t the right time for selling these prime properties,” he added.
AI has identified another 20 properties including those in Tokyo, Hong Kong and Nairobi for sale, which would fetch at least Rs. 2,000 crore, sources said. The Hong Kong property alone is expected to raise over Rs. 75 crore.
The airline has appointed a three-member oversight committee comprising Justice Dharamadhikar, a former Supreme Court judge, former CVC Pratyush Sinha and former CAG VN Kaul to oversee the property sale process.