New Delhi: The government expects to complete
the privatisation of Air India by year-end and the winning
bidder is likely to be known by the end of June, Union
minister Jayant Sinha said today.
The debt-laden carrier, which is staying afloat on
taxpayers' money, would be put up for sale as "four different
entities", while private players can have at least 51 per cent
stake in the airline.
The Minister of State for Civil Aviation said the
information memorandum for the proposed strategic
disinvestment of Air India would be issued in the next few
weeks.
The memorandum would lay out details about various
aspects, including what would be available for bidding, assets
and how much stake the government would own, he told reporters
here.
"We expect to have a winning bidder by the end of June
and the legal closing of this transaction by end of this
calendar year," Sinha said, adding that so far two formal
expressions of interest have been received by the ministry.
Legal closing means that by that time, "all of the legal
agreements, security clearances, transfer of assets, transfer
of title, deeds, everything will be complete. So Air India
will be operated by somebody else", he noted.
The expression of interest in Air India disinvestment has
come from no-frills airline IndiGo and a foreign bidder, about
whom details were not disclosed by the minister.
As part of reviving the ailing airline, the government
has decided on its strategic disinvestment last year and a
group of ministers, headed by Finance Minister Arun Jaitley,
is working out the modalities of the stake sale.
"We are privatising Air India. That means more than 51
per cent of ownership of Air India is going to be transferred
to private sector. We will be transferring control to the
private sector, that means government's ownership will be 49
per cent or less," Sinha said.
He also noted that Air India would be transferred to the
private sector just like British Airways, American Airlines,
Lufthansa and Qantas.
According to the minister, the national carrier would be
offered for bidding as four different entities.
Air India, its low-cost arm Air India Express and
subsidiary AISATS would be one entity while regional arm
Alliance Air would be a separate entity.
Besides, Air India Air Transport Services Ltd (AIATSL)
and Air India Engineering Services Ltd (AIESL) would be sold
separately, he said.
AISATS is a 50:50 joint venture between Air India and
Singapore Airlines' group entity SATS Ltd.
To a query on whether he had discussions with various
players in respect of Air India disinvestment, Sinha said,
"I have had many discussions with many different players for
Air India as well as various different entities that belong to
the Air India group."
Under the turnaround plan approved by the previous UPA
regime, Air India is to receive up to Rs 30,231 crore from the
government, subject to meeting certain performance thresholds,
over a ten-year period starting from 2012.
The airline has already received more than Rs 26,000
crore under the package.
For 2018-19, the carrier has been allocated Rs 650 crore
in the Union Budget.
In June 2017, the Cabinet Committee on Economic Affairs
(CCEA) gave its in-principle nod to the strategic
disinvestment of the airline -- which has a debt burden of
more than Rs 50,000 crore.
"The government has also initiated the process of
strategic disinvestment in 24 CPSEs (Central Public Sector
Enterprises). This includes strategic privatisation of Air
India," Jaitley had said in his Budget speech on Thursday. PTI
