NEW DELHI: The government is planning to sell its entire stake in Air India through an international bidding process that is expected to start next month, sources said.
The government may also hold roadshows for the disinvestment process abroad to woo potential bidders.
However, a final call on the percentage of stake to be sold in Air India will be taken by a Group of Ministers.
Officials said they had prepared separate notes for selling 100 per cent and 74 per cent stake in the national carrier.
Last year, the government had asked for initial bids to sell a majority 74 per cent stake in the carrier but the sale did not materialise as there were no buyers.
According to civil aviation ministry officials, some potential bidders had last year expressed concerns over certain clauses in the bid document that forbade mergers with other existing airlines as long as the government continued to be a shareholder. Concerns were also expressed over the government’s veto power on downsizing.
“Restrictive clauses are likely to be replaced this time round as we need to re-kindle interest in the airline. However, protection will be given to existing employees,” said officials.
While foreign stakes will be allowed, currently there is a 49% cap on foreign ownership.
Unless the FDI rules are changed, it will restrict foreign airlines wishing to bid for Air India to be junior partners in a bidding consortium.
Earlier this month, Finance Minister Nirmala Sitharaman had said in a select interaction with the media that the government “can think of a bit more than 49%” foreign direct investment in civil aviation.
Figure it out 49 per cent
The current foreign direct investment limit in domestic carriers.