Air India to be split into four before sale, says Aviation Minister Sinha
Stake sale of Air India will be split into four separate firms and will be completed by end of 2018.
National carrier, Air India will be split into four parts for its sale that is expected to be completed this year.
Junior Aviation Minister Jayant Sinha speaking in an interview confirmed that the stake sale of Air India will be split into four separate firms and will be completed by end of 2018.
The government will also assume non-core debt of Air India before the sale, he added.
Sinha added that Air India and Air India Express, a subsidiary of the national carrier, will be sold as one company.
Last year, senior government officials said the Central government may not sell Air India’s domestic and international operations separately. Their concern was centred around Air India’s valuation that may further take a hit if it hives off Air India into two companies and invites bids for its domestic and international operations.
Speaking about the employees of Air India, the government has been mulling absorbing the employees into public sector undertakings.
However, these talks were still in exploratory stage, a report by Economic Times said.
Air India has an estimated debt burden of Rs 50,000 crore. Along with its subsidiaries it has nearly 29,000 employees.
Last week, while tweaking the foreign direct investment norms in India, the government allowed foreign airlines to invest up to 49% in Air India.
“As per the extant policy, foreign airlines are allowed to invest under government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India,” the Cabinet said.
Subject to the conditions that:
1. Foreign investment(s) in Air India including that of foreign Airline(s) shall not exceed 49% either directly or indirectly
2. Substantial ownership and effective control of Air India shall continue to be vested in Indian National.
So far, IndiGo has expressed formal interest in the national carrier. Singapore Airlines via the Tata Group is also open to bid for Air India.