- The carrier is auctioning a residential building in Mumbai, besides some flats in Delhi and other places
- MSTC, which specialises in conducting e-auctions, will handle the online auction
Air India is auctioning more than 60 real estate assets, including some it could not sell at its last auction in April, as the debt-laden national carrier makes a renewed attempt to raise funds.
The last date for submitting bids is August 30, according to a tender document issued by the airline.
State-owned MSTC, which specialises in conducting e-auctions, will handle the online auction for Air India.
The properties on the block include a 14-apartment residential building at Mumbai’s Pali Hill, individual apartments at Mahim, Colaba and Bandra, apart from houses and flats in Kolkata, Nashik, Bengaluru, Lonavla, Hyderabad, Gwalior, Delhi, Amritsar, Bhuj, among others.
The reserve price of these units range from Rs 15 lakh to about Rs 8 crore. Interestingly, the carrier had sold only a few of the 56 properties it had put up for sale in April.
“We missed the target of Rs 500 crore that was to be raised through the sale of real estate assets in FY19. We hope to better our FY19 performances this year,” an Air India official said, requesting anonymity.
“The airline has received a lot of interest for its properties this time around,” the official added. The Union government had in 2012 approved monetising Air India’s real estate assets totalling Rs 5,000 crore over a 10-year period, with an annual target of Rs 500 crore from FY13 onwards.
So far, Air India has raised close to Rs 600 crore by selling prime real estate assets, the official cited above said. The loss-making airline may, however, find it tough to find buyers due to the overall slowdown in the real estate market. According to a July report by ANAROCK, a real estate services company, housing absorption in the top seven cities fell to 68,000 units in the June quarter from 78,520 in the preceding quarter.
“For the first time since 2016, total unit launches are more than units sold in the quarter,” the report said.
A Mumbai-based real estate consultant said Air India may find it difficult yet again to sell most of the properties on the block.
“A large number of these assets are located in prime areas and costs more than similar properties located in other areas of the same cities. Any ‘discount’ on such prominent assets would set benchmarks that other commercial asset owners in these localities would not react well to, as a lower reserve price would affect the market value of similar assets,” the person added.
Air India is expected to report a huge loss during FY19. Provisional figures issued by the government in June showed that the national carrier posted a loss of Rs 7,365 crore in the year-ended March 31, 2019, more than the Rs 5,337 crore loss in 2017-18.
The loss in 2017-18 narrowed 17 percent from the previous year, though it topped the Civil Aviation Ministry’s provisional estimate of an Rs 3,579 crore loss.
Air India’s net debt widened to Rs 58,351.93 crore in FY19 from about Rs 55,000 crore in FY18.It received an equity infusion of Rs 30,520.21 crore from the government till date as a part of its 2012 turnaround plan, which entitled it for budgetary support of Rs 30,231 crore over a decade.The Great Diwali Discount!
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