The much awaited privatisation of national carrier Air India (AI) is likely to be completed by March 2020 and a lot of interest has been shown by potential investors in the international roadshows for the debt laden carrier, Finance Minister Nirmala Sitharaman said in an interview.
The union government is adamant to sell the public sector enterprise by the end of this financial year to complete its divestment target of Rs 1 lakh crore. According to a senior government official, the centre may invite expression of interests (EoIs) by the end of this month or early next month. However, the invitation process might be delayed depending on the response and recommendation from interested parties.
“Post receiving the bids, the higher authority would want to complete the deal in a month or two, which is in line with what the finance minister said,” the official further said.
The disinvestment of the airline will be handled by Department of Investment and Public Assets Management that reports to the finance ministry, and the final call on the process would be taken by AI Specific Alternative Mechanism headed by Home Minister Amit Shah.
The government has already approved changes in the process of disinvestment where the prospective bidders will be heard in roadshows to address genuine concerns. It has also hinted relaxing certain norms that led to the failure of its first attempt to privatise the airline.
Last year, the government had initiated the process to offload a 76 per cent stake in the carrier and wanted to retain the remaining. However, it did not get a single bidder as investors feared potential government interference in the operations of the airline.
The airline’s debt grew to Rs 58,351.93 crore at the end of March 2019 from Rs 55,000 crore at the end of March 2018. AI posted an operating loss of around Rs 4,600 crore in the last financial year.
AI employee unions are likely to oppose privatisation of the airline as according to them there is still no clarity on various fronts.
Earlier this month, Air India chairman Ashwani Lohani, in an open letter to Air India employees, had said that the divestment may enable the airline’s sustainability and management is taking necessary steps to protect their interests.
DIPAM to handle disinvestment
The disinvestment of AI will be handled by Department of Investment and Public Assets Management (DIPAM) that reports to the finance ministry, and the ultimate call on the process would be taken by AI Specific Alternative Mechanism