India will get rid of its air debt and its fire into a separate entity

India plans to transfer a "substantial portion" of Air India's debt and its groundhandling unit to a separate entity in order to ease the carrier's burden of state in trouble after an unsuccessful attempt at sale.

been incorporated and the 100% government interest in Air India Air Transport Services Ltd. will be transferred to him, said today to the press the secretary of aviation, RN Choubey. The stake will be sold to a buyer and the proceeds from the sale will be used to pay off the Air India debt, he said. Choubey refused to share the amount of Air India debt that will be transferred to the new entity.

The decision to cancel the national carrier's debt came after the government failed to secure any offers for a previous 76% Air sale project. India and its half in the ground handling unit. As at March 31, 2017, a potential buyer was expected to badume the carrier's total debt of Rs. 33,390 crores as of March 31, 2017.

The decision to transfer the debt and cash processing unit Ground handling services in a separate entity was taken at a meeting of the Alternative Mechanism, or a group led by Finance Minister, Arun Jaitley, looking for ways to promote the disinvestment of the domestic carrier. The committee decided to look for events of interest for the ground handling unit.

The government had previously received unsolicited offers from four to five companies interested in bidding for Air India 's groundhandling arm. "It will be a successful strategic sale," Choubey said. However, he pointed out that it was difficult to set a timetable for the sale and that this would depend on the time needed to transfer the subsidiary into the ad hoc vehicle.

The replacement mechanism also decided to divest the subsidiary. Public Helicopter Service Pawan Hans Ltd. and SBI Capital Markets issue a request for proposal and a draft share purchase agreement.

The new proposal is to sell the shares of the government (51%) and the 49 (Oil and Natural Gas Corporation Ltd.) percentage stake in Pawan Hans against the previous project of only giving up the government stake.