June 14, 2018 TnH Global 0

Government open to the idea of listing Air India

The Centre is open to listing ailing state carrier Air India, a government source said on Wednesday, after failing to attract buyers for a 76 percent stake in the company. The government was considering several proposals related to reviving the divestment process, including selling its entire 100% stake in debt-laden carrier since a residual holding was being seen as a likely deterrent toward drawing bidders to the unprofitable airline.

“A certain kind of strategy was offered that didn’t find many takers and, therefore, something different will have to be done,” economic affairs secretary Subhash Chandra Garg told Bloomberg in New Delhi. “There’s no fixed objective that the government should have 24%. It can be re-examined.”

While policy makers had viewed the residual government stake as a “confidence building measure,” it was cited as one of the reasons for the lack of bids for the carrier, Garg further said.

Air India did not receive any interest on a proposal to sell 76% of the government’s stake by May end. On June 4, ET reported that the government’s decision to retain 24% in the airline after privatisation was a ‘non-starter’ for many probable bidders. An official had told ETthen that there was no point in keeping any residual stake with the government.

The government had offered to sell 76% in Air India, which included 100% in lowcost international subsidiary Air India Express and 50% in ground handling company AISATS.

The government will approach the alternate mechanism, headed by the finance minister, with a new proposal on Air India divestment. The proposal will be prepared by a committee of secretaries, led by the cabinet secretary.