NEW DELHI: Loss-making Air India's plan to
raise money by selling or partially leasing more than 100 properties has been
stymied by an unusual problem:missing ownership
papers. Senior AI officials said that ownership
documents of over one-fifth of the properties are not in place delaying the
debt-laden carrier's sale plan. Asset sales are critical to turning around the
airline which has debt of Rs 43,000 crore and continuous losses for more than
four years.
About 10 properties, including the terminal office in Delhi's Baba Kharak Singh Marg, the employees' housing colony at Nerul (in Navi Mumbai), flats in Mumbai and Hong Kong and property in Chennai have been put on fast track for a sale or lease. But it has been unable to begin the process as papers for many properties, including the 1.7 lakh square feet office inBaba Kharak Singh Marg in Delhi are missing.
"It has now surfaced that registration was never made for the Baba Kharak Singh Marg office. Possession was taken but registry (of the property) never made. Asset monetisation this fiscal hinged heavily on this property but how will government sell it if the registry has not been made?" a senior government official in the know told ET. These properties in question were acquired over time since its inception.
This is only one such example, the official said, adding that it now appears that Air India doesn't have the papers for over 20% of the total properties. "Complete papers for properties don't exist, which is posing a big problem to the asset monetisation plan," he said. What has led to this situation is the haphazard and unprofessional manner in which things have always been handled at Air India.
"In spite of such a large land bank and huge properties, there's never been a realty management department or anything close to it. We have got to know about this only because asset monetisation has to be commenced. Who will buy or take a lease if proper documents are not available?" the official said. Raising Rs5,000 crore over the next 10 years by way of asset sales is part of the airline's financial restructuring plan. International property consultant DTZ has been appointed transaction advisor for the process.
Similarly, a much-talked about plan to auction a thousand-odd pieces of artwork to garner funds has also proved to be a non-starter as cataloguing of paintings and sculptures has not taken place even months after an expert committee was set up to do so last November. According to an AI official, the airline management has requested this committee to evaluate each art work over a period of three months so that their monetary value and importance can be ascertained, "but the paintings are at our Nariman Point office and other offices around the world. Even the exact number (of paintings) is not yet known".
About 10 properties, including the terminal office in Delhi's Baba Kharak Singh Marg, the employees' housing colony at Nerul (in Navi Mumbai), flats in Mumbai and Hong Kong and property in Chennai have been put on fast track for a sale or lease. But it has been unable to begin the process as papers for many properties, including the 1.7 lakh square feet office inBaba Kharak Singh Marg in Delhi are missing.
"It has now surfaced that registration was never made for the Baba Kharak Singh Marg office. Possession was taken but registry (of the property) never made. Asset monetisation this fiscal hinged heavily on this property but how will government sell it if the registry has not been made?" a senior government official in the know told ET. These properties in question were acquired over time since its inception.
This is only one such example, the official said, adding that it now appears that Air India doesn't have the papers for over 20% of the total properties. "Complete papers for properties don't exist, which is posing a big problem to the asset monetisation plan," he said. What has led to this situation is the haphazard and unprofessional manner in which things have always been handled at Air India.
"In spite of such a large land bank and huge properties, there's never been a realty management department or anything close to it. We have got to know about this only because asset monetisation has to be commenced. Who will buy or take a lease if proper documents are not available?" the official said. Raising Rs5,000 crore over the next 10 years by way of asset sales is part of the airline's financial restructuring plan. International property consultant DTZ has been appointed transaction advisor for the process.
Similarly, a much-talked about plan to auction a thousand-odd pieces of artwork to garner funds has also proved to be a non-starter as cataloguing of paintings and sculptures has not taken place even months after an expert committee was set up to do so last November. According to an AI official, the airline management has requested this committee to evaluate each art work over a period of three months so that their monetary value and importance can be ascertained, "but the paintings are at our Nariman Point office and other offices around the world. Even the exact number (of paintings) is not yet known".
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