Friday, July 05, 2019

Union Budget 2019: Govt gets ready to re-initiate Air India disinvestment process

The government is getting ready to re-initiate the disinvestment process of national carrier Air India in view of the current environment.

"The government would re-initiate disinvestment of Air India," Finance Minister Nirmala Sitharaman said in her first Budget speech. Sitharaman presented the Union Budget for 2019-20 today.

The minister also said the government would consider keeping its stake below 51 percent in some public sector enterprises on a case-by-case basis, hinting at selling over 49 percent stake in Air India. The government today also said that it would further consider liberalising foreign direct investment in the aviation sector.

Last year, the government had failed to sell Air India when it had offered 74 percent stake. While a lot of parties had shown interest, none of them actually submitted bids. A few companies such as IndiGo suggested that they weren't comfortable in a joint venture with the government.

This year, it is expected that the government may divest up to 100 percent stake in the debt-ridden carrier, making the deal a lucrative one for the buyer.

As first reported by CNBC-TV18 last year, the government had decided to transfer debt amounting Rs 29,464 crore along with other non-core assets to the newly created special purpose vehicle to attract bidder interest for the carrier.

As per the provisional figures of FY 2018-19, the total debt of Air India Ltd as on March 31, 2019, is Rs 58,351.93 crore. While no party has come forward till now to buy Air India, IndiGo has shown interest, however, only for the international segment.
05/07/19 Anu Sharma/CNBC TV18

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