Life Insurance Corporation’s (LIC) plan to buy state-owned Air India land on Baba Kharak Singh in Delhi has hit a roadblock in wake of “title issues” of that land with Air India.
With this, Air India’s target of monetization of this land first has fallen through. Earlier, LIC had evinced interest in purchase of land at around Rs 800 crore.
However, now a senior LIC official told Business Standard, “Presently, we are not interested in buying the land as there are some title issues pertaining to that land. We are not engaged in any discussions with Air India to buy the land.”
AI was earlier expecting to get the registry of this land in its name in this fiscal. However, it is still awaited, confirmed a senior civil aviation ministry official.
Said another senior Air India executive, “We bought the property for Rs 15 crore in 1983. However, it took us time to take possession, as there were many encroachments on it.
An IOCL (Indian Oil Corporation Limited) petrol pump was the last encroachment and cleared just before the Commonwealth Games in 2010.”
Air India expects to raise around Rs 1,000 crore by the end of the next financial year (March 2014) through monetization of five of its prime properties across India.
There are properties besides land on Baba Kharak Singh Marg in this city, Sterling Apartments in Mumbai, the Air India colony in Kolkata, land on the Sowripalayam road in Coimbatore and some land in Chennai.
In addition, four-odd floors of its office in South Mumbai’s Nariman Point have been leased to StateBank This programme was to have got going this year but it appears the ownership documents of a fifth of the properties are not available, delaying the sale plan. However, AI has combined the targets for 2012-13 and 2013-14.
DTZ, international property consultant for AI’s land monetisation, is working on how best to proceed, by sale or renting it out. As the property is government-owned, the final decision on monetisation will go through the airline’s board, the aviation ministry and the cabinet, the official added.
Asset sales are critical to turning around the airline, which has debt of Rs 43,000 crore and made losses continuously for four years. Raising Rs 5,000 crore over the next 10 years by asset sales is part of the financial restructuring plan.
A plan to auction a 1,000-odd pieces of art work to gather funds is also not moving ahead. Their cataloguing has not taken place, though a panel of experts was appointed for the job in November.
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