DRMumbai: National carrier Air India is looking at raising Rs. 500 crore by selling land and real estate in 2018-19, and is likely to sell some of its prime properties across the country, sources privy to the development said. The airline is looking to sell several of its land blocks and real estate, including a 4-acre piece of land at Delhi’s Baba Kharak Singh Marg, a residential colony at Vasant Vihar; a piece of land in Chennai, and a half-acre plot in Mumbai’s Pali Hill that houses about 14 apartments, sources said.
“While some of the properties will be sold by Air India, the Union Government will sell other properties that were leased by the airline (from the government),” an official with the airline said. “The government has identified several Air India properties it could sell on behalf of the airline that was earlier leased from the government for a long term. The divestment-bound airline has been able to mop up Rs. 445 crore through land monetisation after the government-approved Turn Around Plan (TAP) in 2012 set a target of Rs. 5,000 crore for land monetisation over a period of 10 years, Jayant Sinha, Minister of State for Civil Aviation, Government of India, told Rajya Sabha in February.
Sinha said the airline had not been able to achieve its land monetisation targets due to issues with title deeds. “Most title deeds for properties that the airline is planning to sell during 2018-19 are in place. Several public sector companies have enquired about its properties. The airline will not need Cabinet approval to sell its land to public sector companies, while a Cabinet nod would be required if properties were to be sold to private companies,” the official added.
The Union Government, which plans to divest Air India by December, plans to create a special purpose vehicle (SPY) to house the airline’s working capital debt (about Rs.35,000 crore), and some land assets like the former headquarter in Nariman Point building and hotels run by the airline. An analyst tracking the sector said under the condition of anonymity that Air India hasn’t found buyers in the past for its land as it set very high valuations. “The airline will have to bring down the valuation of some of its land assets like the Pali Hill property, which had a reserve price of over Rs. 200 crore, to be able to meet its targets,” the analyst added.
