The government will push ahead with the stake sale in Air India and hopes to wrap up the transaction by June, according to government sources.
The Union Cabinet gave an in-principle approval for strategic disinvestment in Air India in June last year and a panel of ministers headed by FM Arun Jaitley is now devising the strategy for executing the sale.Tata Group, which runs two JV airlines in India, IndiGo and Jet Airways are among the Indian carriers who may bid for Air India. Some foreign airlines have also expressed interest informally.
“Transaction advisers have been appointed. We will complete the process by June,” said an official, who did not wish to be identified. The latest comments come against the backdrop of a move by a Parliamentary panel, which is likely to recommend that Air India be given five years to revive and its debt be written off.
The Parliamentary Standing Committee on transport, tourism and culture has concluded that the government should review its decision to privatise or disinvest Air India and explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride”, a news agency has reported.
Disinvestment of Air India gathered pace after the NITI Aayog recommended up to 100% stake sale, along with writing off its debt. PM Narendra Modi is keen to ensure a strategic disinvestment in the loss-making airline. The government is weighing several options to deal with the large debt pile of the airline. The NITI Aayog, in its recommendations, had detailed a road map for Air India’s stake sale, which includes writing off loans to the tune of Rs 30,000 crore.
AI has debt of around Rs 60,000 crore, which includes around Rs 21,000 crore of aircraft-related loan and around Rs 8,000 crore working capital loan, according to estimates.