The government is set to invite bids for selling its 100% stake in in Air India Ltd soon in order to meet its divestment target. According to a report in Mint, the government may float an expression of interest (EoI) document for the airline within this month.
“The expression of interest document for Air India will be put out anytime now, at least before the end of this month. The plan is to sell 100% stake in the airline. The proposal needs clearance from a ministerial panel before it is made public,” a finance ministry official told Mint.
The ministerial panel formed for the purpose of Air India divestment is also likely to meet soon to clear the privatization process, said the report. The panel is headed by home minister Amit Shah, while its members include finance minister Nirmala Sitharaman, civil aviation minister Hardeep Puri and railway and trade minister Piyush Goyal.
The sale of Air India would not only help the Union government exit a loss-making business, but would also compensate for the loss in revenue due to the corporate tax rate cut.
Air India, which has 128 planes, has seen its net debt rising to Rs 58,351.93 crore at the end of March 2019 from about Rs 55,000 crore a year ago. The debt-laden airline has been surviving with the help of a Rs 30,000 crore government bailout.
The Air India divestment was first attempted in March 2018, but the plan had failed as investors were wary of the government retaining a 24% stake in the airline. Besides that, huge debt of over Rs 33,000 crore at that time and the requirement to stay invested in the airline for at least three years led to poor investor interest.
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