Press Information Bureau
Government of India
28 FEB 2019 10:28PM by PIB Delhi
Cabinet approves setting up of SPV for disinvestment of Air India and its Subsidiaries/JV

The Union Cabinet chaired by Prime Minister Narendra Modi has given ex-post facto approval for the creation of the Special Purpose Vehicle (SPV) and associated activities for the disinvestment of Air India and its subsidiaries/JV.


          An SPV namely Air India Assets Holding Ltd. (AIAHL) has been created for warehousing accumulated working Capital Loan not backed by any asset along with four Subsidiaries (Air India Air Transport Services Ltd. (AIATSL), Airline Allied Services Ltd. (AASL), Air India Engineering Services Ltd. (AIESL) and Hotel Corporation of India Ltd. (HCI), non-core assetspainting and artefacts and other non-operational assets of Air India Ltd. to an SPV.

  • Ministry of Civil Aviation (MoCA) issued order for creation of a new SPV. The SPV, Air India Assets Holding Ltd. was incorporated on 22nd January 2018. The Board of Directors of SPV includes CMD, Air India Ltd. and Joint Secretaries of MoCA, Deptt. of Expenditure, Deptt. of Economic Affairs, DIPAM and Director(Finance) Air India Ltd.
  • As on date, one subsidiary, namely AIATSL has been transferred to AIAHL, as per the Share Purchase Agreement between Air India Ltd. and AIAHL subject to conditions precedents which include lenders’ approval.
  • Preliminary Information Memorandum (PIM) for disinvestment of AIATSL has been issued on 12.02.2019 by AIATSL with last date of submission of Expression of Interest (EOI) on 26.03.2019.

          The Government has decided to transfer following to the newly-created SPV:

  1. Debt of Air India Ltd. amounting to Rs. 29,464 crore;
  2. The subsidiaries which are not part of Air India strategic disinvestment viz. AIATSL, AIESL, AASL are to be shifted to the SPV; and
  3. Non-core assets, painting and artifacts and other non-operational assets of Air India Ltd.


          The approval will ease warehousing of Air India’s subsidiary companies approval namely, AIATSL, AIESL, AASL and HCI from Air India to the newly created SPV company. The disinvestment proceeds will be utilized to set off the working capital loan liability of Air India not backed by any asset also warehoused in the same SPV.