Starting the ambitious strategic disinvestment process for the debt-laden national carrier, the Central government has unveiled its plans to sell up to 76 per cent stake in Air India and transfer the management control to private players.
Coming out with a detailed preliminary information memorandum on the stake sale, the Civil Aviation Ministry reportedly said the proposed disinvestment would include profit-making Air India Express and joint venture AISATS. The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.
While the government would retain 24 per cent stake in the national carrier, the winning bidder would be required to stay invested in the airline for at least three years, media agencies reported.
Starting off the disinvestment exercise—a major initiative of the NDA government—Expression of Interest (EoI) has been sought from various entities, including foreign airlines, they reported.
The last date for submission of EoI is May 14 and intimation to the qualified interest bidders would be made on May 28, reported PTI.
Bidding can be done as a single player or as part of a consortium. The bidder should have a minimum net worth of Rs 5,000 crore and the requirement is subject to certain conditions depending on the class of entities, the report said.
Among others, the ministry has reportedly said that each consortium member should have positive profit after tax in at least three of the immediately preceding five financial years from the EoI deadline.
“However, if the member of the consortium is a scheduled airline operator in India, the condition to meet positive profit after tax shall not apply to such member provided shareholding of such member is restricted to maximum of 51 per cent of paid up equity share capital of the consortium (special purpose vehicle). In case of a foreign airline (ie airline which is not a scheduled airline operator in India), the requirement to meet positive profit after tax requirement shall remain applicable,” it reportedly said.
Bids by management and employees of companies participating directly or by forming a consortium would be considered subject to guidelines issued by the Department of Investment and Public Asset Management (DIPAM), the report said.
The consortium can be along with a bank, venture capitalist, a financial institution or fund, reported PTI.
Four other subsidiaries of the airline—AIESL (Air India Engineering Services Ltd), AIATSL (Air India Air Transport Services Ltd), HCI (Hotel Corporation of India) and AASL (Airline Allied Services Ltd)—would be hived off through demerger or any other appropriate mechanisms, as per the memorandum the report said.
