Govt to divest 76% stake in Air India and Air India Express, 50% in AISATS
28 Mar 2018
The government proposes to sell 76-per cent stake in Air India and its subsidiary Air India Express, retaining a minority a 24 per cent in the national carrier, as part of its divestment programme.
Besides, the government is proposing to divest 50-per cent of its stake in Air India’s airport services AISATS, according to a report in the Hindu BusinessLine. The report said the divestment will be carried out through an open competitive bidding and the divestment process is expected to get under way in the next few days with the government extending global invitation for Expression of Interest (EoI).
While details of the divestment programme have not yet been revealed, several airlines, including IndiGo, Jet Airways, Singapore Airlines and low-cost Gulf carrier Air Arabia have shown interest in bidding for Air India, although in parts.
The government is proposing a strategic divestment of the airline by transferring management control and sale of 76 per cent of its equity share capital in Air India, one of the worst performing state enterprises.
Ernst and Young is the transaction advisor to the government on the divestment process.
The government has stipulated a net worth criterion of Rs5,000 crore for parties interested in bidding for Air India, against which the state-owned airline owes over Rs50,000 to its creditors.
The divestment of Air India stake has been hanging fire as the airline with zero net worth, has also eroded its brand value over the years due mainly to political interference.
Finance minister Arun Jaitley, in his budget speech, had said that the government had initiated the process of strategic divestment in 24 CPSEs, which included privatisation of Air India.
Earlier, IndiGo had submitted an unsolicited EoI for acquiring Air India.
Turkish company Celebi has also shown interest in bidding for the airline’s ground-handling activities
The Centre for Asia Pacific Aviation (CAPA) had, as early as January this year, said that up to four Indian carriers — Jet Airways, IndiGo, SpiceJet and Vistara — and one or two non-airline companies could be interested in the opportunity that a stake in Air India has to offer.
Besides, the Air France-KLM combine is also said to be keen on tying up with Jet Airways to form a consortium to bid for the state-owned airline.