Ministry approves Air India’s plan for employee stock options

The civil aviation ministry has approved a proposal by state-owned National Aviation Co. India Ltd, or Nacil, which runs Air India, to issueup to 5% of the firm’s equity capital as shares to employees.
The issue of shares, under a so-called employee stock option plan, or Esop, in 2008-09 is seen a first step towards an initial public offering (IPO) of Nacil shares later.
Under Esop schemes, employees are allotted shares at a “fair” value determined by an independent valuer, or at the market price if the firm is listed. After a vesting period, typically three-five years, the shares are transferred to the employees who can hold or sell them.
Nacil, the company which runs the largest Indian airline by fleet size, has an annual revenue of about Rs15,000 crore. The airline has a paid-up equity of Rs145 crore, which it is authorized to expand up to Rs1,500.05 core.
“An in-principle approval has been granted to them,” said civil aviation secretary Ashok Chawla in an interview. “A small percentage of government equity will be shared in a certain pattern,” he added without elaborating.
31/01/08 Tarun Shukla/Livemint

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Categories: Air India - International Jan 2008, Air India Budget Jan 2008, Air India Domestic Jan 2008, Air India Regional Jan 2008, NACIL Jan 2008