Mumbai, June 28: The iconic Air India building located at Mumbai's posh Nariman Point will be reportedly purchased by the Jawaharlal Nehru Port Trust (JNPT). The largest port container of India, JNPT, has shown keen interest in helping the debt-ridden airline firm. As per a Times of India news report, the JNPT is eyeing the rentals from the 23 storeyed building, by deploying its cash reserves of around Rs. 4,700 crore.
As per reports, the government has already set up an inter-ministerial panel of bureaucrats to decide and recommend various modalities for the government-to-government sale of property. The building is spread over three lakh square feet built-up area and has 23 floors. Currently, 17 floors of the building have been rented out by the Air India, and it generates Rs. 100 crore rental to the airline organisation. The reports also mention that the JNPT will purchase the building based on its cost, and how reasonable the price will be. Furthermore, JNPT will not change the name of the iconic building, and it will be continued to be called Air India.
The move has come, following the union government decision to postpone the plan to sell 76 percent stake in Air India, citing the current economic condition. The airline is under a major financial crisis and has debt of Rs. 50,000 crore. A large sum of their revenue is used to repay these debts. And to make matters worse, Air India is also facing fierce competition from other airlines.
Speaking about JNPT's interest, a source was quoted as saying: "The new owner(JNPT) will have about 60 years of the lease of this building and hence can be a better investment proposition for the government undertakings which are sitting on huge cash. Because of the bureaucratic reason these entities prefer to put money in banks or as equity in projects rather than exploring more profitable opportunities and can be one such opportunity."
Reportedly, the government had failed to get investors earlier to make a sale. The Prime Minister Narendra Modi had given the go-ahead to sell the Air India building to help the debt-ridden airline. The building was the corporate headquarters of the airline until 2013. In February 2013, Air India officially vacated the building as part of its asset-monetisation plan and shifted its corporate office to Delhi.
(The above story first appeared on LatestLY on Jun 28, 2018 12:57 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).