India Markets closed

Air India privatization: GoM led by Amit Shah to meet today to discuss carrier divestment

FE Online
On Monday, Air India said AIAHL's bond issue with a three-year tenure of Rs 1,000 crore with a green-shoe option of Rs 6,000 crore was fully subscribed at 6.99 per cent.

A group of ministers led by Home Minister Amit Shah is set to meet on Thursday to discuss Air India privatization as the government looks to reduce its stake in the state-run carrier. The panel, which will have Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri, will discuss key issues relating to selling 100% stake in the airline, Air India debt position, attracting investors by making terms better, relaxing FDI norms, and issuing Expression of Interest, according to various media reports. Ahead of the GoM meet, the finance minister also met Hardeep Singh Puri on Wednesday. 

While the government has several times states that it does not want to remain in the business of Air India, it has now also opened up to the possibility of selling a partial stake in the cash-strapped carrier to a foreign airline, Reuters reported unidentified sources as saying. Further, the government has moved about Rs 30,000 crore of the national carrier’s debt to a separate holding company. Air India still will be left with roughly another Rs 30,000 crore of debt, the news agency reported.

Meanwhile, Hardeep Singh Puri has been aggressive on Air India divestment plan and has said on various occasions that the airline is a lucrative deal for investors. “I wouldn’t worry much about the previous attempts of sale. Maybe we have learnt lessons from that,” Hardeep S Puri told Bloomberg in an interview a few days ago. The civil aviation minister has also said on multiple occasions that the airline will be a profitable enterprise for any private players due to its assets and the overall boom in the Indian aviation industry. “I think it is an attractive buy,” the minister then told Bloomberg. Air India currently owes over Rs 58,000 crore to various lenders. 

The Narendra Modi-led government had revealed new plans for Air India privatization during Union Budget 2019.