Loss-making AI to sell or lease its assets to monetise funds
State owned Flag carrier Air India’s (AI) balance sheet has been in red for the last many years and the loss making company is reeling under the pressure to bring back its lost sheen. AI has approached the government of India undertaking company National Buildings Construction Corporation Ltd. (NBCC) to help it monetise its assets.
The government recommended that the monetisation of assets is a part of a bailout plan in 2012. However the loss-making carrier has not been able to sell or lease its assets and improve the Profit and Loss statement of the company. AI has been trying to sell or lease its assets, including the land and buildings and has not met with much success.
A top Air India executive mentioned that they are working on signing a memorandum of understanding (MoU) with NBCC for the monetisation of assets. According to another executive, a draft MoU has been exchanged with NBCC and is being studied by both the parties. The executive also mentioned that they have not yet decided on the date for signing of the MoU and that should happen soon.
Unfortunately in India the government companies most of the sectors lag behind in professionalism. Aviation sector has gone through a lot of ups and downs in the last few years due to the lack of revenues and high fuel prices. The government owned AI was one of the worst hit as their service levels were poor and the customers preferred the private carriers while travelling.
Source- The Economic Times
ai, Air India, Aviation sector, Buildings, Funds, Land, memorandum of understanding, MoU, National Buildings Construction Corporation Ltd, NBCC
