Tuesday , 11 December 2018
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Government to split Air India’s debt ahead of stake sale: minister

India will transfer part of Air India’s $ 8.5 billion debt pile to a special purpose vehicle before selling a stake in the state-owned carrier, its Junior Civil Aviation Minister, Jayant Sinha told Reuters on Friday.

Jayant Sinha said the government had already decided to split the debt into sustainable and unsustainable debt. “The unsustainable part will be with the special purpose vehicle (SPV),” he said on the sidelines of an event in Mumbai.

He did not elaborate but Bloomberg, citing sources, reported in November that the government had proposed transferring non-aviation assets and up to Rs 300 billion in short-term loans into a separate company.

The Prime Minister, Narendra Modi’s cabinet gave the go-ahead last year to sell the loss-making flagship airline, after successive governments spent billions of dollars in recent years to keep it solvent. But its debt burden and bloated cost structure have been a concern.

The India’s civil aviation secretary, Rajiv Choubey, said on Thursday that the government would invite initial bids for Air India in the next couple of weeks. Reuters

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