Ministerial panel set to meet next week to decide AI future

NEW DELHI: A ministerial panel is set to meet next week to explore options regarding the future of Air India Ltd, after an attempt to sell part of the government’s stake in the airline faced a setback last month.

The options before the panel may range from getting Air India listed to full privatization or even calling off the sale, said an official who spoke on condition of anonymity.

That decision is expected to be a political one as the government’s handling of the loss-making national carrier has the potential to become a thorny political issue in the last year of the National Democratic Alliance (NDA) government before national elections are held next year.

One of the options policymakers are examining is to let Air India tap the capital markets by getting listed, the official cited above said. The profitability of the company will be a key criteria in getting listed. The Securities and Exchange Board of India’s norms mandate that a company that goes for initial public offer has to have a reported a pre-tax operating profit in at least three of the immediately preceding five years. Air India has been reporting net losses since fiscal year 2007-08, the year in which it had been amalgamated with another state-owned aviation company, Indian Airlines.

However, chairman Pradeep Singh Kharola said in Air India’s annual report for 2016-17 that for the second consecutive year, the airline had posted an operating profit—₹298 crore in 2016-17 and ₹105 crore in the year before.

The company said this was possible as a result of improvements in capacity utilization. Figures for the last fiscal year, 2017-18, are not immediately available.

The ministerial panel, which includes finance minister Piyush Goyal and civil aviation minister Suresh Prabhu, will review the treatment of Air India’s debt, the manner and quantum of strategic disinvestment and universe of bidders and the terms that are binding on the investor after the transaction. MUMBAI: US private equity (PE) behemoth Blackstone Group Lp on Wednesday said it has raised $9.4 billion for two Asia-focused private equity funds, signalling the increasing focus of the global private equity industry on Asia.

Blackstone closed its first Asia private equity fund at about $2.3 billion, while it separately raised $7.1 billion for its second regional “opportunistic” real estate fund, the New Yorkbased firm said in two separate statements.

The development holds major significance given that this is the first time that Blackstone has raised a dedicated private equity fund for Asia. Until now, it had been investing in Asia from its global buyout funds.

“We are thankful for our investors’ support and believe we are well-positioned to seize the ongoing opportunities in Asia. The region continues to experience strong growth compared to other major markets, presenting compelling investment opportunities across sectors,” Joe Baratta, Blackstone’s global head of private equity, said in a statement.

Blackstone manages approximately $111 billion of assets under its private equity business.

With the recent fund raising, the Us-based firm has joined the league of other global PE firms such as KKR & Co., Carlyle, TPG and Bain Capital, which either already have dedicated Asia funds or are raising one.