Air India likely to be divested by year-end
The government expects to complete the privatisation of Air India by year-end and the winning bidder is likely to be known by the end of June, Union Minister Jayant Sinha said on Friday. The debt-laden carrier, which is staying afloat on taxpayers' money, would be put up for sale as "four different entities", while private players can have at least 51 per cent stake in the airline.
The Minister of State for Civil Aviation said the information memorandum for the proposed strategic disinvestment of Air India would be issued in the next few weeks. The memorandum would lay out details about various aspects, including what would be available for bidding, assets and how much stake the government would own, he told reporters in the capital on Friday.
"We expect to have a winning bidder by the end of June and the legal closing of this transaction by end of this calendar year," Sinha said, adding that so far two formal expressions of interest have been received by the ministry. Legal closing means that by that time, "all of the legal agreements, security clearances, transfer of assets, transfer of title, deeds, everything will be complete. So Air India will be operated by somebody else", the Minister noted.
The expression of interest in Air India disinvestment has come from no-frills airline IndiGo and a foreign bidder, about whom details were not disclosed by the minister. As part of reviving the ailing airline, the government has decided on its strategic disinvestment last year and a group of ministers, headed by Finance Minister Arun Jaitley, is working out the modalities of the stake sale. "We are privatising Air India. That means more than 51 per cent of ownership of Air India is going to be transferred to private sector. We will be transferring control to the private sector, that means government's ownership will be 49 per cent or less," Sinha saidHe also stated that Air India would be transferred to the private sector just like foreign carriers British Airways, American Airlines, Lufthansa and Qantas.
According to the junior Minister, the debt-ridden national carrier would be offered for bidding as four different entities. Air India, its low-cost arm Air India Express and subsidiary AISATS would be one entity. The regional arm Alliance Air would be a separate entity. Besides, Air India Air Transport Services (AIATSL) and Air India Engineering Services (AIESL) would be sold separately, he said. AISATS is a 50:50 joint venture between Air India and Singapore Airlines' group entity SATS.