New Delhi, Nov 27 (IANS): The Central government has decided to go in for a strategic disinvestment of Air India's ground handling subsidiary to partially retire the national passenger carrier's accumulated debt.

Accordingly, an inter-ministerial panel, Air India Specific Alternate Mechanism, decided on Tuesday to divest the government's 100 per cent stake in Air India Air Transport Services Limited (AIATSL).

The decision was taken after the panel which is headed by Finance Minister Arun Jaitley met here. It assumes significance as the amount raised from the divestment of AIATSL will be used to retire some of the accumulated debt of Air India.

A senior government official said the strategic disinvestment of ground handling subsidiary AIATSL will be done after the ground handling unit is transferred to a SPV (special purpose vehicle).

The official told reporters that the EoI (Expression of Interest) document will then be issued.

Earlier, the inter-ministerial panel had decided to revive the national passenger carrier by sale of land and other assets and to offload its debt to an SPV which has already been incorporated.

The firm -- AIATSL -- provides ground handling service at most of the airports in India. It was operationalised in February 2013.