August 31, 2017 TnH Global

Govt to appoint transaction advisers for Air India disinvestment

After a ministerial group met to discuss various aspects of Air India stake sale, the government has decided to appoint transaction advisers.

The government has decided to appoint transaction advisers for Air India disinvestment, Finance Minister Arun Jaitley said on Wednesday after a ministerial group met to discuss various aspects of the stake sale. The group, headed by Jaitley, held deliberations for nearly an hour in New Delhi. “We discussed several issues. We have decided to appoint transaction advisers,” he said.

Apart from Jaitley, Civil Aviation Minister Ashok Gajapathi Raju, Railway Minister Suresh Prabhu and Power Minister Piyush Goyal as well as senior officials were present at the meeting. Air India’s interim Chairman and Managing Director Rajiv Bansal and senior officials from the airline as well as the civil aviation ministry were present.

“These decisions are to be taken expeditiously but in their normal course,” Jaitley said earlier in the day in response to a query about the Air India stake sale process. On 28 June, the Cabinet Committee on Economic Affairs (CCEA) had given its in-principle for strategic disinvestment of Air India and five of its subsidiaries.

Subsequently, an Air India-specific alternative mechanism was set up to guide the process. The ministerial group is looking into treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries, among other aspects.

At least two parties—IndiGo and Bird Group—have formally evinced interest in Air India disinvestment and have written to the civil aviation ministry in this regard. Air India is staying afloat on taxpayers’ money and the airline has a debt of more than Rs. 50,000 crore.

Lets give it a thought that would it be a good deal for Indigo and Bird Group to invest in an organisation which is in debt of such big amount?