Cash-strapped Air India (AI), which is surviving on a government bailout, is planning to raise more than R5,000 crore by selling its properties worldwide by 2016 — five years ahead of the target set by a government panel as part of the airline’s turnaround plan (TAP).
Putting the monetisation process on the fast track, the AI board on Thursday approved the sale of three properties — one each in Kolkata, Chennai and Coimbatore. The sale of another two properties, including four apartments on Peddar Road, Mumbai, each valued at more than Rs. 25 crore, and a plot in Gurgaon, had earlier been cleared by the AI board.
AI plans to raise at least Rs. 1,200 crore from the sale of these properties by March next year. Sources said it had identified for sale another 20 properties.
These include properties in Tokyo, Hong Kong and Nairobi — which would fetch at least R2,000 crore. The Hong Kong property is expected to earn more than Rs. 75 crore.
The carrier has also signed a lease agreement with State Bank of India for five floors of its iconic sea-facing 23-storey Nariman Point building to turn in a rent of around R14 crore in three years. AI plans to retain only the 21st, 22nd and 23rd floors of the building.
The airline has appointed a three-member committee comprising former Supreme Court judge Justice DM Dharamadhikari, former central vigilance commissioner Pratyush Sinha and former comptroller and auditor general VN Kaul to oversee the monetisation process.
“An online auction would be held for the properties and an international consultant has done their valuation,” an AI official said.
“The money so raised would be deposited in an escrow account and used to retire the mounting debt.” AI has a debt of nearly Rs. 50,000 crore.
At the time of the merger of AI and Indian Airlines (IA) in 2007, a valuation of the properties of both was done. The properties owned by IA were valued at Rs. 6,145 crore while those of AI at Rs. 2,062 crore.