Saturday, December 30, 2006

Air India, Indian merger take-off may be delayed

With the union cabinet yet to give its nod for the proposed merger, it is expected that the commencement of the Air India and Indian merger process could surpass the Apr. 1, 2007 deadline, reports Business Line.
While awarding the contract to consultants Accenture, to draw out a roadmap for the merger, it was decided that pre-cabinet work would be completed in 10 weeks, while all post-cabinet approvals would be obtained within 16 weeks. In addition, Accenture was to supervise the new merged entity for 52 weeks to ensure that the entire process would be completed by March 2008.
The deadline for the merger process to start from April 1 was based on the assumption that the cabinet would accord clearance to the proposal by the end of this month. The committee of secretaries, to whom the matter was referred by the group of ministers (GoM), has already come out in favour of the merger. But the GoM and the cabinet are yet to consider the proposal.
A senior government official said there could be some delay on meeting the statutory timeframe, as the companies will have to give notice to the creditors and lenders about the process.
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