New Delhi: The Union Cabinet on Thursday gave its ex-post facto approval for the creation of a special purpose vehicle (SPV) for the disinvestment of Air India and its subsidiaries and joint ventures.


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An SPV named Air India Asset Holding Ltd (AIAHL) was set up on January 22 last year as part of financial restructuring of the debt-laden national carrier.


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.


An official release said that the government has decided to transfer to the newly-created SPV the debt of Air India Limited amounting to Rs 29,464 crore as well as non-core assets, painting and artifacts and other non-operational assets of Air India Limited.


Subsidiaries which are not part of Air India strategic disinvestment viz. AIATSL (Air India Air Transport Services Limited), AIESL (Air India Engineering Services Limited), AASL (Airline Allied Services Limited) are to be shifted to the SPV, it added.


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.


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.