Speaking at the inaugural edition of Moneycontrol Wealth Creator Awards in Mumbai, Prabhu said that the airline still holds value despite the high debt levels.
Admitting that initiating the stake sale process of Air India was not right, Suresh Prabhu, Union Minister for Commerce & Industry and Civil Aviation, said that the airline is battling legacy issues.
In a conversation with Gaurav Choudhury, Deputy Executive Editor, Moneycontrol, at the inaugural edition of Moneycontrol Wealth Creator Awards in Mumbai, Prabhu said that the airline still holds value despite the high debt levels.
"The airline faces legacy issues and has an unsustainable amount of debt. Also, the timing of Air India divestment was not right. Air India has intrinsic strength and global footprint. The airline can become profitable if debt can be trimmed. IBC says that if businesses have unsustainable debt, it has to be restructured. Similar should be the case with Air India," Prabhu said.
The government had originally proposed to offload 76 percent equity share capital of the national carrier as well as transfer the management control to private players. The buyer would have had to take over Rs 24,000 crore debt or the carrier along with over Rs 8,000 crore of liabilities.However, the stake sale failed to attract any bidders when the bidding process got completed on May 31.