Fresh bid to sell Air India to begin in November

After a failed attempt last year, Air India is all set to go under the hammer yet again with the government planning to call interested parties after Diwali for a 100% stake sale in the national carrier.

Air India is hopeful of a sale this time around despite choppy market conditions and its hopes have been bolstered after it mopped up Rs 21,985 crore by way of bond issues in the last one month.

“Something will happen shortly. The process (of divestment) should start very soon with the release of EoI. Once the EoI is issued, we hope there will be buyers this time as we have made lot of changes that could attract other airlines in the yet-to-be released document,” a top official aware of the development told DH.

This is the second time that the government is coming out with the expression of interest (E0I) for disinvestment in Air India. The EoI is being prepared by the Group of Ministers led by Home Minister Amit Shah and the document will be out early next month.

In the fresh EoI, the government is likely to offer 100 per cent stake for the buyers as against a limited stake last time. “There are several things which are being worked out at the top level. One of them is offering 100 per cent stake for the buyers so that they don’t worry about any interference,” the official said.

The senior official said since the divestment process is on, the carrier’s expansion plans in terms of buying new aircraft have been put off. To a question on mass resignation of its pilots, the official said only five of those who had put in their papers have left in the past month.

Meanwhile, the Civil Aviation Ministry has said the third bond issue of Air India was fully subscribed. The issue of 10-year tenure bonds worth Rs 1,000 crore, received bids to the tune of Rs 15,100 crore.

The government is preparing to divest its stake in Air India that has a debt burden of more than Rs 54,000 crore.

The Narendra Modi government in its first tenure had decided to divest its stake in the national carrier, which is running in loss for more than a decade and invited prospective buyers. The first attempt ended with no buyers evincing interest and the government appointed a GoM headed by Shah to take forward the process of selling Air India, the national carrier.

Apart from Shah, the GoM comprises of Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri. Air India has a total debt of Rs 58,351 crore as on March 31 this year and the national carrier is surviving on a bailout package given by the government.