The government is considering listing of debt-laden Air India after the proposal for 76 per cent strategic stake sale failed to attract any bidders, a source said Wednesday. The source in the government said various options, including possible listing of the national carrier, are being looked at. Listing of Air India would help in garnering revenues as well as retain control of the airline, the source said.
In a major setback, the government on May 31 said that no initial bids were received for the proposed stake sale in Air India and that various options would be explored for the airline’s future. The listing option is also being considered as reportedly there have been concerns among potential bidders about the government retaining 24 per cent stake in the airline post disinvestment.
Under the proposed disinvestment plan, around Rs 33,000 crore debt would have remained with Air India. The national carrier’s debt burden was about Rs 50,000 crore at the end of March 2017. On June 7, Civil Aviation Minister Suresh Prabhu said the future course of action for Air India disinvestment process would be decided by the group of ministers. On whether the government would dilute the bidding norms to attract players, he had said the decision would be taken by that group of ministers only.
“There are several alternatives before Air India. All alternatives will be discussed by the group and (they will) decide the best possible alternative in the given situation,” he had told PTI. The government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players, as per the preliminary information memorandum. The transaction would involve Air India, its low cost arm Air India Express and Air India SATS Airport Services Pvt Ltd. The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.
However, various unions of Air India employees have been opposing Air India disinvestment proposal. RSS-affiliate Swadeshi Jagran Manch (SJM) has been pitching for an Initial Public Offer (IPO) of the airline. Soon after the deadline for submitting Expression of Interest (EoI) for Air India stake sale ended on May 31 without eliciting any response, SJM co-convenor Ashwani Mahajan had said there is need to save Air India and make it run efficiently. “… saving it from foreign sharks, avert colluding operators by formation of cartels; bringing efficient management keeping bureaucracy at bay and maintaining it a national carrier. All this is achievable by IPO, not strategic sale,” he had tweeted.