The Group of Ministers (GoM), chaired by Home Minister Amit Shah for the disinvestment of Air India met at North Block on Thursday to discuss the airline’s sale. The meeting was attended by Finance Minister Nirmala Sitharaman, Commerce and Railways Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri.
Sources said that the ministers discussed modalities for the sale of Air India, which has a debt burden of over Rs 58,000 crore. In 2018-19 alone, Air India incurred losses of around Rs 7,600 crore.
“I am not in a position to make any announcement. Please allow the process to move forward. However, it was a productive meeting where all issues concerned were discussed. The process will commence now,” Puri told reporters after the hour-long meeting. The government invited bids from investors in 2018 to buy-out the government’s 76 per cent stake in the debt-ridden airline, along with management control. However, the process failed as investors did not submit bids.
Following that, a report was prepared by a private entity citing probable reasons that led to the failure of the sale process. The reasons cited included the government retaining a 24 per cent stake and corresponding rights, high debt, volatile crude oil prices, fluctuations in exchange rate, changes in macro environment and restriction on bidding by individuals.
The Department of Investment and Public Asset Management has already prepared a fresh proposal for the Air India sale, incorporating issues like crude oil prices and exchange rate volatility.
This time, the government could sell its entire 100 per cent stake in Air India as it aims to conclude the process by December 2019, sources said.
However, a final call on the quantum of stake to be offered to investors and the right time for floating the expression of interest would be decided by the newly constituted Air India Specific Alternative Mechanism, the sources said.