Committed to accelerate Air India’s disinvestment program soon, government is likely to invite the initial bids in a couple of weeks, PTI reported citing Civil Aviation Secretary RN Choubey. The process of Air India’s disinvestment is likely to invite Expressions of Interest (EoIs) from interested parties in the coming few weeks, PTI reported. Currently, the ministry is also engaged in finding buyers for its subsidiaries and Pawan Hans, the report said. Last year in June, the Union Cabinet provided an in-principle approval for debt-ridden Air India’s disinvestment, paving a way for its privatisation. The modalities are still being worked out for stake sale. The government expects the strategic disinvestment of loss-making entity by early this year.
In September last year, the government invited applications from investment bankers, and law firms to advise it on the stake sale. Air India is already pressured under debt of Rs 52,000 crore. Out of the total debt, Rs 28,000 crore amount to working capital debt and nearly Rs 4,000 crore is interest burden. Air India, which hasn’t turned profitable in last 10 years since year 2007, has a hold over 17 percent of the international traffic from and into India. Till now, the airlines has received about Rs 24,000 crore worth of bailout packages. However, it hasn’t helped much in its economic revival.
Tata group is widely reported to be exploring options to take over Air India. Notably, the Tata group were the original owners of Air India, before the carrier was nationalised in 1953. On the other hand, rival private carrier IndiGo has officially shown interest in buying the beleaguered state-run carrier. Bird Group, that offers aviation services namely aircraft navigation, ground handling, customer management & logistics, has also expressed interest in buying a stake in Air India.
It was in May last year that Finance Minister Arun Jaitley had for the first time indicated towards selling stake in debt-struck Air India. The market share of Air India in the airlines market is only nearly 14 percent whereas the debt burden is Rs 50,000 crore, he had then said clearly indicating possible stake sale in the national carrier.