To obtain revenue and pay off its debt, Air India will begin auctioning dozens of its assets across India. The airline intends to raise 270 crores ($36.1 million) from the sale, which will be used to improve its balance sheet prior to the disposal. Let's look into it more.
Bidding on dozens of Air India properties around India will begin later today, at 14:00 local time, and will end tomorrow. Moneycontrol reports that the flag carrier is looking to generate at least 270 crores ($36.1 million) from the auction process in order to monetize its assets. Today, 28 assets will be auctioned off, providing insight into Air India's non-airline holdings.
Five homes at the Asian Games Village in south Delhi, 14 flats on a huge 2,003 sqm property in Pali Hill, Bandra, and several more are among the properties up for auction. Air India is selling not only residential space, but also its booking office in Aurangabad, as well as staff quarters and other amenities.
The various properties have bidding values ranging from $13.3 lakhs ($17,800) to 150 crores ($20 million). As a result of the epidemic, the airline has reduced the price of some properties in major cities by up to 10% in order to increase participation.
Air India is no stranger to real estate sales. In 2019, the carrier staged two surplus property sales, each with 60 and 56 excess properties. All of these decisions were made in order to increase the airline's financial reserves and reduce its massive debt. Many of the properties up for auction today, however, went unsold in 2019.
This comprises 14 flats in Mumbai's Bandra neighborhood, as well as properties in Kolkata, Bangalore, and other cities. With reduced pricing and a much different market today, Air India hopes to fulfill and even exceed its asset sale goal.
The homes up for grabs have sparked a lot of attention this time around. Hundreds of individuals have visited the residences in Delhi, and Air India has received over 500 calls from people looking for information on different properties. Another advantage is that, because the purchase is made directly with the government, there is minimal doubt about the final price and paperwork.
We'll find out in the next 24 hours whether Air India was successful in selling 28 of its key assets around the country. If all goes according to plan, it will be one step closer to achieving its asset monetization targets before privatization.
The two bidders for Air India are now scrutinizing the airline's internal data as it prepares to go private. Although SpiceJet CEO Ajay Singh was initially refused access to the data because of his senior position, it is unclear whether he now has access. Regardless, the government hopes to complete the ultimate sale of Air India by the end of 2021, with the Tata Group appearing to be the frontrunner at the moment.
