NEW DELHI: As the government is gearing up to divest its stake in the loss-making national carrier Air India, the pre-existing conditions which prohibited investors from going ahead with the bidding process last year are likely to be dropped.
According to sources, terms and conditions such as the government retaining a 24 per cent share, and not allowing the brand to merge with other airlines, among others, could be removed when the government invites fresh expressions of interest.
The government might even allow merger and reverse merger of Air India with the existing business of investor to develop synergy. Also, a larger stake in Air India may be offered for sale.
The government’s changing approach towards foreign direct investment in the aviation sector and a $15 billion divestment target set for financial year 2019-20 indicates that the government doesn’t want a repetition of its 2018 exercise.
The government move to transfer a large chunk of AI’s loan is also likely to attract the attention of potential buyers.
The government has created the Special Purpose Vehicle to park AI’s debt of over Rs 29,000 crore, meaning, investors in the airline will only have to pick up aircraft related and other sundry debt.
As per the provisional figures of FY 2018-19, the debt of Air India Ltd. as on March 31, 2019, was Rs 58,351.93 crore.