Depressed rates in the real estate hit Air India
Air India is unable to realise the objective of monetizing its assets due to depressed rates in real estate market. The company had three year plan to earn Rs 1,200 crore in FY14, Rs 2,000 crore in FY15 and Rs 1,800 crore in FY16 through this route. This money was to be used to retire debt. Now, the company expects only Rs 200 crore to come from the sales and leases of assets. The target was Rs 200 crore.
The airline has a debt of Rs. 30,000 on its balance sheet and the adverse market conditions have adversely affected the plans to clear the debt. In the current financial year 2013-14, the company has sold land parcels in Kolkata and Coimbatore for Rs 20 crore each, which are yet to be cleared by the government. AI officials have also cited procedural issues and clearances for the delays in implementation of the plans.
The company has land parcels in Delhi, Hong King, Mumbai, among other cities. The company await clearance for sale of land on Baba Kharak Singh Marg (in Delhi) from Union ministry of urban development. This property can fetch around Rs. 800 crore.
Source: Business Standard
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