Ambanis meet Shourie on IA, AI

He sought industry’s views on privatisation of two airlines and said that issues raised by Ambanis and others would be duly addressed in the bid documents.

The government decided to bring down its equity in Indian Airlines to 49 per cent and offer 26 per cent stake to a strategic partner. In the case of Air India, where government would lower its stake to 40 per cent, strategic partners are being offered 40 per cent holding including 26 per cent for a foreign partner.

Shourie asserted that government would not resort to selling of its stake in PSUs in the blind pursuit of attaining the disinvestment target of Rs 10,000 crore set for the current financial year.

"Targets are important but this does not mean a distress sale to meet the target… our objective is not to just raise money but to make best use of resources, ensure competition and job security," Shourie said.

In this context he asked the oil PSUs to strengthen their position and said the government decision to sell four stand-alone refineries to IOC and BPCL was intended to help these companies prepare for eventual competition after dismantling of administered pricing mechansim by 2002.

"In refineries, Reliance has 40 per cent of the total refining capacity. It is necessary that the PSUs strengthen their presence in this sector," he said adding that valuation of the oil companies would be decided by the finance ministry and petroleum ministry.

Singapore Airlines has expressed keen interest in Air India but has said that it would be able to make its stand on whether or not to bid for stake in AI clear only after the government comes out with its expression of intent.

J M Morgan Stanley has been appointed as global advisor for Air-India while IDBI, ANZ Grindlays Bank and Speedwing Consortium are the advisors for Indian Airlines disinvestment.

Reiterating that the entire process of disinvestment would be transparent and advice of CVC would be taken wherever required, Shourie said this, however, did not mean that the process would become slower and work held back because of transparency.

"Decisions on disinvestment will have to be expeditious," he said, adding that the next meeting of the Cabinet Committee on disinvestment would take place on 26th of this month after the Prime Minister’s return from the US where more PSUs would be taken up.