Air India divestment back on the table

New Delhi: With the Left parties off its back, the new government has brought the disinvestment of Air India back on its agenda.
The proposal had been first mooted during the NDA government and had been carried on to the previous UPA government. Government sources said the idea was frozen after firm opposition from the Left, as well as growing losses of the former ‘national carrier’.
“This is one point that has been put (back) on the table. Like earlier, the mode of an initial public offering (IPO) would be looked at,” said a government source.
A spokesperson of National Aviation Company of India Ltd (Nacil), the government company which owns the carrier, refused to comment.
Experts say with annual losses mounting to Rs 3,000 crore, as per figures disclosed by civil aviation ministry sources, an IPO is unthinkable in the near future. AI’s losses in 2008-09 are understood to have doubled as compared to 2007-08, when these stood at Rs 1,500 cr, according to official sources.
At a Nacil board meeting in Mumbai yesterday, discussions were held on the requirement of working capital worth Rs 3,000 cr, likely to be raised through debt. AI’s debt figure is understood to be touching Rs 14,600 cr already.
22/05/09 Business Standard

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Categories: NACIL May 2009