The Government of India is likely to take a final call on the much awaited sale of Air India from a panel of senior ministers led by Union Home Minister Amit Shah within a week. It is rumored that Tata Group has emerged as a front-runner.
However, the ministry said media reports indicating approval of financial bids by Government of India in the Air India disinvestment case are incorrect. “Media will be informed of the Government decision as and when it is taken.”
A source said the final call will be taken by the Air India specific alternative mechanism. Finance Ministry officials on Friday said the winner will be shortly decided, while terming media reports of having approved any party’s bid as “incorrect”.
Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey tweeted that media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. “Media will be informed of the government decision as and when its taken.”
The winning financial bidder would get control of Air India’s 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas, including London’s Heathrow Airport. It would also get 100% of the low-cost arm Air India Express and 50% of AISATS, which provides cargo and ground handling services at major Indian airports.
The national carrier has a total debt of Rs 60,074 crore as of March 31, 2019. They buyer will need to take on debt of Rs 23,286.5 crore. The remaining amount will be transferred to an SPV, Air India Assets Holding Ltd (AIAHL). The SPV will monetize AI’s assets like property and land bank, and use those funds to pay off the debt.
According to ToI, the sale of Air India is expected to spur the government to put other stake sales such as BPCL, Shipping Corporation of India, Concor, BEML on the fast track. Furthermore, the sale is expected to bring in greater urgency to accelerate work on the privatization of two state-run banks and an insurance company.