Wednesday, March 04, 2020

Air India selloff: NRI holding may not be part of 49% cap

New Delhi: The government is likely to clarify that NRI ownership of Air India (AI) will not be considered, while calculating the upper limit of 49% foreign holding for meeting the binding substantial ownership and effective control (SOEC) norm.
Sources said this clarification will be given to remove any doubts on the issue and pave the way for effective divestment of the debt-laden Maharaja in the second attempt. If not sold this time, AI could face closure, the government had warned.
A couple of big UK-based NRI business families have long been keen to operate an airline in India and had even looked at the now-grounded Jet Airways.
“The upper limit of 49% ownership by a foreign airline in any Indian carrier, like Vistara and AirAsia India, is binding for meeting the SOEC norms. Among AI’s biggest assets is its rights to fly abroad and slots at airports abroad including the highly constrained London Heathrow. Increasing 49% foreign airline ownership norm for AI could be construed by some countries as being a violation of SOEC norm and they may deny an AI owned half or more than that by a foreign airline from flying there on Indian bilaterals,” said a person in the know.
04/03/20 Saurabh Sinha/Times of India

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