SBI to buy Air India properties in south Mumbai

AFTER the successful completion of e-auction recently, country's largest lender State Bank of India has received all necessary approvals to buy residential properties of cash-starved national carrier, Air India, in south Mumbai for Rs 90 crore.

"The bank has got all the required approvals and it has conveyed its willingness to buy the properties from Air India. SBI is now waiting for the airline to complete its side of approvals," sources close to development were quoted as telling a news agency.

SBI is planning to...

allocate these flats to its top executives of the rank of deputy managing directors and general managers.

The ailing airline that has off late been termed as a sick PSU had been looking for buyers who can purchase its four flats at up-market Peddar road in south Mumbai since last two years.

In August 2013, the national airline had floated bids for e-auctioning of these four flats.

Each of these 3-BHK flats measures 2,033 sq ft in carpet area. Confirming the communication from the bank on proposed real estate deal, an Air India official said the airline has sent the proposal to the civil aviation ministry for its approval.

The proposal is now with the ministry for its approval.

Air India has some working capital borrowings from SBI, besides long-term loans.

The funds raised from the sale proceeds would help reduce this working capital loan besides reducing the interest outgo, airline sources had earlier said.

The decision to sell these flats is part of the national carrier's plan to unlock the value in its land assets.

Under the land monetisation plan, Air India plans to mop up Rs 5,000 crore over a 10-year period in its bid to bridge the mismatch in its revenue and expenditure.

On March 14, SBI auctioned around 300 properties including residential, offices, shops and factory buildings) valued around Rs.1,200 crore online. The e-auction, the first of its kind in the country, was conducted for the country's largest bank by Ahmedabad-based Auction Tiger, and properties were listed on the magicbricks.com website.