After Air India divestment flop, ministers' group to decide action: Prabhu
09 June 2018
The future course of action for the Air India disinvestment process will be decided by a group of ministers after no initial bids were received for the proposed stake sale in the debt-laden national carrier, civil aviation minister Suresh Prabhu said on Thursday.
He said that all alternatives will be discussed by the Air India Specific Alternative Mechanism (AISAM) group headed by union finance minister Arun Jaitley.
"The future course of action will be decided by the group of ministers," Prabhu told PTI.
On whether the government would change the bidding norms to further dilute the government’s holding and attract buyers, he said that the decision could only be taken by the group of ministers.
"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 said.
The deadline for submission of Expressions of Interest (EoI) ended on 31 May with not a single bidder evincing interest in the airline.
In nearly two decades, this is the second time that an Air India stake sale has failed to take off. Back in 2001, during the then NDA government, the disinvestment process was scrapped.
The government has 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 will involve stake sales in 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.
Under the proposed disinvestment process, around Rs33,000 crore debt would have remained with Air India. The national carrier's debt burden was about Rs50,000 crore at the end of March 2017.