The government is likely to clarify that a non-resident Indian can hold more than 49 percent stake in Air India as per the current norms, sources close to the development told CNBC-TV18.
The clarification, which is likely to be a part of a response to queries raised by potential bidders, will state that the equity shareholding of a non-resident Indian will not be considered a foreign direct investment as the person is a citizen of India but only residing overseas.
As per the current Aircraft Act and foreign direct investment norms for domestic airlines, up to 49 percent foreign direct investment is permitted in Air India as the substantial ownership and effective control has to stay with an Indian national.
The last date of submission of written queries on preliminary information memorandum and share purchase agreement ended on February 11 and hence, the transaction advisor Ernst & Young LLP India is expected to issue a clarification on the queries raised by interested parties.
"There is some confusion on FDI. We will clarify that NRI investment will not be part of FDI. The clause of substantial ownership and effective control needs an Indian national with majority shareholding in Air India and NRIs are Indian nationals," a source aware of the matter said.
Additionally, CNBC-TV18 has also learnt that there are no plans to tweak the FDI policy with respect to Air India as of now.
12/02/20 Anu Sharma/CNBC TV18
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The clarification, which is likely to be a part of a response to queries raised by potential bidders, will state that the equity shareholding of a non-resident Indian will not be considered a foreign direct investment as the person is a citizen of India but only residing overseas.
As per the current Aircraft Act and foreign direct investment norms for domestic airlines, up to 49 percent foreign direct investment is permitted in Air India as the substantial ownership and effective control has to stay with an Indian national.
The last date of submission of written queries on preliminary information memorandum and share purchase agreement ended on February 11 and hence, the transaction advisor Ernst & Young LLP India is expected to issue a clarification on the queries raised by interested parties.
"There is some confusion on FDI. We will clarify that NRI investment will not be part of FDI. The clause of substantial ownership and effective control needs an Indian national with majority shareholding in Air India and NRIs are Indian nationals," a source aware of the matter said.
Additionally, CNBC-TV18 has also learnt that there are no plans to tweak the FDI policy with respect to Air India as of now.
12/02/20 Anu Sharma/CNBC TV18
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