Government eyeing to pocket $1bn from sale of Air India
What's the story
According to an official, the government is planning to raise around $1bn (around Rs. 7,000cr) from the sale of state-run carrier Air India in the next financial year.
Reportedly, the government will initiate the process of disinvestment in the airline some time in the second half of 2019-20, and in the mean time, will try to sell some of Air India's subsidiaries.
Here's more.
First attempt
An attempt to sell 76% stake resulted in failure
Initially, the government had planned to sell 76% stake in the national carrier in May last year, but that attempt resulted in failure, presumably because the buyer would have to take over Rs. 24,000cr in debt and an additional Rs. 8,000cr in liabilities.
Subsequently, a panel led by Finance Minister Arun Jaitley decided to scrap the plan and look for alternatives.
Capital infusion
Subsequently, funds were pumped into Air India
It was decided that fresh funds would be infused into the carrier, and attempts would be taken to reduce Air India's debt through the sale of land assets and other subsidiaries of the airline.
Then, in August, the government poured Rs. 980cr in equity capital into the airline, and followed it up with another Rs. 2,345cr infusion earlier this month.
Properties
In September, several Air India properties were put on sale
Meanwhile, efforts were also taken to reduce Air India's debt.
In September last year, the government invited bids to sell Air India's properties across India in an attempt to raise resources.
28 flats in Mumbai, seven flats in Ahmedabad, and two flats and an office space in Pune were put up for sale, among other properties located across the country.
Other details
Sale of AI subsidiaries has already been cleared
Meanwhile, the ministerial panel has already cleared the sale of several subsidiaries under Air India, including its ground handling subsidiary, Air India Transport Services, and another subsidiary, Air India Engineering Services.
In the mean time, a plan to revive the airline through a comprehensive financial package, and robust organizational and governance reforms is also in place.
Time will tell what Air India has in store.