After its failure to sell stake in Air India last year, the government may make yet another attempt to divest its stake in the debt-laden national carrier, said media report. Meanwhile, the bid to sell Air India's real estate assets received a lukewarm response.
Accordingly, efforts by the civil aviation ministry and the Department of Investment and Public Asset Management (DIPAM) in the finance ministry are already underway to woo potential investors to invest in Air India when the divestment process begins, said a report in Business Standard quoting people aware of the development.
The government may not hold any residual stake in the airline keeping in view the last year's unsuccessful privatisation bid. It is said that there is a plan to retain 5 percent shares for the employee stock option (ESOPs) while divesting 95 percent stake in Air India, said the report.
Meanwhile, Air India's prime realty assets failed to attract buyers as it managed to sell only less than 10 of the 56 properties that were put up for sale in April this year, reported Mint quoting two people directly aware of the development.
The auction panel is expected to re-auction some of the properties as the officials felt that the reserve price of these assets was not in tune with the market conditions, which dissuaded the buyers, said the report.
The reserve price of these properties, mostly residential units, ranged from Rs 16 lakh to about Rs 8 crore and were located in cities such as Mumbai, Delhi, Pune, Bengaluru, Chennai and Kolkata.
In January this year, the government had said that it would initiate the process of strategic disinvestment of Air India in the second half of 2019-20 and in between it would work towards selling some of its subsidiaries and monetise assets.
The government was eyeing around $1 billion (about Rs 7,000 crore) from the sale of the national carrier.
Air India has a debt burden of Rs 55,000 crore. In November last year, a ministerial panel headed by finance minister Arun Jaitley had approved transferring Rs 29,000 crore debt to a special purpose vehicle (SPV) — Air India Asset Holding Company.
In June 2017, the government had approved strategic disinvestment for Air India. After nearly a year-long search for potential bidders, it had in May 2018 abandoned the plan in the absence of receiving any initial bids the proposed stake sale.
In May 2018, Civil Aviation secretary RN Choubey had said the government could decide against selling state-run Air India if it did not get "adequate" price for it.
The loss-making airline already received more than Rs 26,000 crore under the bailout package announced by the former United Progressive Alliance (UPA) government in April 2012. The UPA government had approved a turnaround plan under which Air India is to receive a total equity infusion worth Rs 30,231 crore up to 2021, subject to meeting certain performance thresholds.
In April last year, Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagwat had said Air India should be owned by an Indian player who could run it efficiently.
Cautioning the government against "losing control and ownership of its skies", Bhagwat said Air India's operations have not been managed properly.
Updated Date: May 27, 2019 15:39:50 IST