After a failed bid to sell national carries Air India in 2018, the Centre, which has set a divestment target of Rs 1.05 lakh crore for the financial year ending March 31, has yet again put up the Maharaja for sale. This time, however, the government has announced sale of 100 per cent stake in the debt-laden airline as it issued the preliminary bid document for the strategic disinvestment with the deadline for submitting expression of interest set as March 17. As a result of the 100 per cent stake sale, management control of the airline would also be transferred to the successful bidder.
In addition, as part of the strategic disinvestment, Air India would also sell 100 per cent stake in low-cost airline Air India Express and 50 per cent shareholding in joint venture AISATS, as per bid document issued on Monday. The government looks to raise around Rs 60,000 crore through the sale.
This is the second time in less than two years that the government has come out with proposal for selling stake in Air India, which has been in the red for long. Interested parties will have to submit the expression of interest (EoI) before March 17.
AISATS is an equal joint venture between Air India and Singapore Airlines. It offers ground handling services. Air India also has interests in Air India Engineering Services, Air India Air Transport Services, Airline Allied Services and Hotel Corporation of India.
These entities are in the process of being transferred to a separate company—Air India Assets Holding Ltd (AIAHL)—and would not be a part of the proposed transaction, the document said.
According to the document, debt of Rs 23,286.5 crore would remain with Air India and Air India Express at the time of closing of the disinvestment. The remaining debt would be allocated to AIAHL.
EY is the transaction adviser for Air India disinvestment process.
In 2018, the government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players. However, there were no bidders.
The national carrier, which has a debt burden of more than Rs 50,000 crore, has been making loss for long and as part of revival efforts. Air India's net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore.
(With PTI inputs)