Wednesday, September 18, 2019

Air India selloff: GoM to set the ball rolling on Thursday

New Delhi: Union home minister Amit Shah-led group of ministers (GoM) on Air India divestment is slated to hold its first meeting on Thursday and set the ball in motion for the second attempt to sell off the Maharaja. Learning from last time’s experience, Modi 2.0 administration could sweeten the terms of sale to attract investors which include opting for near-total exit and attaching a lower debt burden on the on-sale Maharaja. That will be finalised by the Shah-led panel that has Union finance, commerce and aviation ministers N Sitharaman, Piyush Goyal and H S Puri, respectively, as members.

Last March, Modi 1.0 had offered to sell 76% stake in AI. And of the airline’s total debt of almost Rs 60,000 crore, bidders for the airline arm were expected to take over debt of Rs 24,576 crore and current liabilities of Rs 8,816 crore or a combined burden of Rs 33,392 crore. These terms saw no bids coming in for AI.

This time, the conditions could be majorly revamped to ensure AI gets a good buyer. Puri has already spoken of complete exit from AI. About 1-2% may be retained for being offered to employees. The debt burden could be significantly reduced and the process of cleaning up AI’s book has begun. “The meet is tentatively planned and is subject to the ministers’ availability,” said sources.

“There should be a plan B also this time to decide what to do with AI if the second attempt is also a cropper. The Plan B must decide right now whether the government will continue running AI as a PSU or shut it down if it gets no buyers/or not the right price offer. This is similar to us planning a flight from origin to destination where we keep fuel to fly to an alternate airport in case we can’t land at the destination for any reason,” said a senior pilot.
18/09/19 Saurabh Sinha/Times of India
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