Air India sale offer may be finalized by month-end

The expression of interest (EoI) document for privatizing state-owned Air India Ltd is likely to be finalized by November-end, two people familiar with the matter said, requesting anonymity.

A core group of secretaries led by cabinet secretary Rajiv Gauba on Thursday discussed the privatization of the national carrier. The EoI document was expected to be finalized at the meeting, but has now been delayed, said the people mentioned above.

“The core group of secretaries on divestment will meet again to finalize the EoI document,” the first person said. “Once the EoI document is finalized by the core group of secretaries, the final approval will be given by the ministerial panel headed by home minister Amit Shah,” he added.

Other members of the ministerial panel include finance minister Nirmala Sitharaman, commerce and railway minister Piyush Goyal and civil aviation minister Hardeep Singh Puri.

The proposed EoI for the divestment of Air India was initially slated to be issued in end-October. This was then pushed to early November, after the airline’s management briefed several employees’ unions over the proposed divestment process and its ramifications.

In September, Puri had said the process of privatization of the airline was underway and the government would take all decisions within a specified time frame.

The government’s earlier attempt to divest a part of its stake in the national carrier had failed to find any taker in 2018. Many investors were uncomfortable with the government retaining a 24% stake in the airline. However, the government now plans to sell its entire stake in the airline to attract potential bidders.

Air India’s net debt swelled from ₹55,000 crore at the end of March 2018 to ₹58,351.93 crore at the end of March 2019. This includes working capital and aircraft-related debt. Selling Air India, which has about 128 planes, will help the government exit a loss-making business.