New owners of Air India to get planes and $5 Billion of debt

Selling a majority stake in the loss-making, 85-year-old company isn’t going to be a cakewalk. At least one attempt almost two decades ago failed amid fierce political opposition.

India is selling a controlling stake in its flagship carrier along with two-thirds of the loss-making airline’s about $7.8 billion debt, as PM Narendra Modi moves ahead with the nation’s most high profile asset sale in decades.

The government will sell 76 percent of Air India Ltd., according to a document uploaded on the civil aviation ministry’s website on Wednesday. The airline’s overseas budget carrier will be completely sold in the offer, while the state will sell a 50 percent stake in the ground handling unit separately. The administration may also ask the buyer to conduct an initial public offering.

A successful sale of Air India, which is surviving on taxpayer-funded bailouts, is seen as test case for PM Modi to burnish his credentials as a reformist attempting to steer the state away from running businesses and boost spending on health and education. The national carrier has five subsidiaries, a joint venture and a combined workforce of as many as 27,000.

“Selling a 76 percent stake is the second-best option for the government; the best option would have been to exit completely,” said Kapil Kaul, South Asia CEO at CAPA Centre for Aviation, “There’s also a caveat there that the acquirer will have to list the company, which means the government is looking at exiting through an IPO route, which is fair enough and very positive.”

You might also like

Destinations

Sabre to offer NDC-enabled solutions in 2018

Travel technology leader will bring to life the promise of NDC through its innovative retailing, distribution and fulfillment solutions. Demonstrating its full commitment to lead the industry evolution toward next-generation

Destinations

India achieves a record with increased visitors to the UK

Travellers from India set a new visitor record to Britain in 2015 2015 was a record year for Indian visits into Britain according to the International Passenger Survey from the

Destinations

Think Strawberries appointed as the Sales, Marketing, PR & Media Office in India for SCTDA

Think Strawberries has been appointed as the Sales, Marketing, PR & Media Office in India for Sharjah Commerce & Tourism Development Authority to develop the consumer and trade markets for