Choice between 'disinvestment or closing down': Civil Aviation Minister on privatisation of Air India
New Delhi | Jagran News Desk: Union Civil Aviation Minister Hardeep Singh Puri on Saturday said that Air India, the national flag carrier airline of the country, will be completely privatised, noting that it is only a choice between "disinvestment or closing down" the company for the central government.
"We've decided that Air India will be 100 per cent disinvested. The choice isn't between disinvestment and non-disinvestment. It's between disinvestment and closing down. Air India is a first-rate asset but has an accumulated debt of Rs 60,000 crore. We need to draw the slate clean," he said while speaking to news agency ANI.
Puri told the news agency that Air India "must find a new home", adding that the disinvestment process of the national airline carrier will be completed by May or June this year.
"In the last meeting, on Monday, it was decided that the shortlisted bidders (for Air India disinvestment) be informed that the bids have to come in within 64 days...This time the government is determined and there is no hesitation," he said.
The government is selling its entire 100 per cent stake in Air India that has been in losses ever since its 2007 merger with domestic operator Indian Airlines.
The stake sale process got delayed due to the COVID-19 pandemic and the government has extended five times the deadline to submit preliminary bids for the national carrier.
The airline, which started as a mail carrier in 1932, will give the successful bidder control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.
Besides, the bidder would also get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports.
With previous attempts since 2017 failing to get any significant interest, the government had this time sweetened the deal by giving freedom to potential suitors to decide how much of the airline's debt they want to take on as part of the transaction.
Previously, the bidders were required to take over the entire ?60,074 crore debt.
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey had earlier said potential investors in Air India have given feedback that due to the uncertainty created by COVID-19 in the aviation sector the debt should not be fixed at the expression of interest (EoI) stage.
Hence, the government late in October decided to do bidding for Air India based on enterprise value, which includes market capitalisation of a company, short-term and long-term debt as well as any cash on the company's balance sheet.
In the current fiscal, the government has set a record ?2.10 lakh crore target from disinvestment. The target includes ?1.20 lakh crore from the sale of shares of central public sector enterprises(CPSEs) and ?90,000 crore from a share sale in public sector banks and financial institutions, including the listing of insurance behemoth LIC.
So far this fiscal, ?11,006 crore has been mopped up through minority stake sale in CPSEs.
After its unsuccessful bid to sell the loss-making carrier in 2018, the government in January 2020 restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India's 100 per cent shareholding in AI Express and 50 per cent in Air India SATS Airport Services (AISATS)
In 2018, the government had offered to sell its 76 per cent stake in the airline.
(With PTI, ANI inputs)
Posted By: Aalok Sensharma