Air India Disinvestment Process Has Gathered Pace, CMD Tells Employees

Disinvestment Air India - aviatorsbuzz
Source: India Today
Air India Chairman and Managing Director Rajiv Bansal in an office memo issued on Thursday told employees that as the disinvestment process has gathered pace and important legal paperwork and other checklist tasks required under the sale process had to be completed by March 24, 2021.

 

This required the airline offices to remain open on Saturday, this week and hence the office memo that soon enough found its way on to social media. 

 

AI: Government to Divest 100%

Earlier, the government has issued documents to divest a 100 per cent stake in Air India, Air India Express and 50 per cent of Air India’s stake in ground handling company AISATS. Later, there were reports that they don’t want to divest the profitable ground handling company.

According to the 2019 documents, the buyer was supposed to absorb Rs. 23,286.5 crore of debt of the national carrier and the remaining was planned to transfer to a special purpose vehicle, which floated after the failed sale attempt in 2018.

But they revised the sale proposal and said that they will sell the airline to those who take over the bigger debt burden. The airline had a total debt of Rs 60,074 crore as of March 2019, but it would have gone up substantially during the period affected by COVID-19 restrictions.

Shortlisted Buyers May Get Time Till June  

CNBC reported that it had learnt that the shortlisted entities for Air India may be given time till June, early July for financial bids. It is presumed that once the bids are locked, closure of sale may take 3-4 months post evaluation of financial bids. Thus currently a post-September date looks likely for the completion of the process.

 

Recently, the bid to take over Air India by a consortium of its employees, led by the airline’s Director (Commercial) Meenakshi Mallik, came to a nought after they failed to make it to the next round of the divestment process.Now, Tata Group and SpiceJet promoter Ajay Singh are among those left in the bid to take over the national carrier. Tata seems to lead the race at the moment, media reports suggested.Not just the national carrier, the government also proposes to sell Air India Express and 50 percent shareholding in Air India Airport Services Pvt Ltd.

Pawan Hans Attracts Bidders

The Centre is also pushing to divest helicopter service company Pawan Hans, a Mini Ratna-I category PSU. The government said it had received “multiple expressions of interest (EoIs)” for privatisation of national helicopter carrier Pawan Hans, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said on Thursday. The official, however, did not reveal the name of bidders.

The department, which deals with all matters related to disinvestment of equity in central public sector undertakings, said that the transaction will now move to the second stage, Business Today reported.

The deadline for submission of EoIs for Pawan Hans was January 19. In a bid to exit from the chopper operations business, the government in December last year issued a fresh bid document for strategic disinvestment in Pawan Hans. The government intends to sell 51 per cent stake in the mini-Ratna PSU. The remaining 49 per cent stake in the carrier is owned by oil major ONGC.

In the Union Budget 2021-22, Finance Minister Nirmala Sitharaman had announced that disinvestment of state-owned Air India and Pawan Hans would be completed in 2021-22.

The Business Today said in an article that the government targets to raise Rs 1.75 lakh crore from disinvestment in 2021-22. Finance Minister Nirmala Sitharaman had said in the budget speech that strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Limited, among others, would be completed in 2021-22.

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