Saturday, November 02, 2019

Key issues yet to be resolved for Air India sale

The government has decided to ease terms of sale for Air India but it is still facing tough choice on almost half a dozen issues that could be crucial for the airline's successful disinvestment. Among the key issues holding Expression of Interest (EoI), first stage of bidding, is whether FDI norms have to be relaxed to allow foreign airlines to take full control of the airline and extending national carrier status after change in ownership.

While raising FDI limit in domestic airlines beyond 49 per cent for foreign carriers would enthuse carriers like Qatar Airways and Singapore Airlines to participate in the bidding, national carrier status would give right of first refusal to the new owner in seat allocation on international routes.

The other issues include transfer of additional debt to the special purpose vehicle (SPV) and use of brand name Air India in future. As much as Rs 10,000 crore of additional debt, over and above Rs 29,464 crore decided earlier, is proposed to be moved to Air India Assets Holdings Ltd (AIAHL), the special purpose vehicle of Air India for transferring part of its debt and assets.

"Even after transfer of Rs 29,464 crore of debt to SPV, the same amount of debt would still be there. It has to be decided by the group of secretaries and then the ministerial panel as to how much more debt has to be taken out to ensure sale process happens," an official said.
01/11/19 IANS/India TV
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