ETV Bharat / bharat

Air India's fate hangs in balance as GoM begins disinvestment process

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Published : Sep 19, 2019, 9:35 PM IST

A Group of Ministers (GoM), headed by Home Minister Amit Shah, on Thursday met to work out modalities for the sale of Air India which has a debt burden of over Rs 58,000 crore. Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri attended the meeting.

Air India's fate hangs in balance as GoM begins disinvestment process

Air India's fate hangs in balance as GoM begins disinvestment process

New Delhi: A Group of Ministers (GoM), headed by Home Minister Amit Shah, on Thursday concluded without yielding results on the proposed modalities for the sale of Air India, which has a debt burden of over Rs 58,000 crore. However, ministers claimed that process have began towards disinvestment.

Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri attended the meeting.

Air India's fate hangs in balance as GoM begins disinvestment process

Speaking to ETV Bharat, Hardeep Singh Puri claimed that all issues have been taken on board and process have began towards the disinvestment of Air India.

"I am not in a position to make any announcement. Please allow the process to move forward. However, it was a productive meeting where all issues concerned were discussed. The process will commence now," Puri said.

Sources said the GoM discussed the modalities for the sale of Air India.

In 2018-19, Air India incurred losses of around Rs 7,600 crore. By the end of 2018-19, it had a debt burden of around Rs 58,300 crore. In its first term, the Modi government invited bids from investors in 2018 to buy out the government's 76 per cent stake in Air India, along with the management control. However, the process failed as investors did not put in bids.

Following that, a report was prepared by a private entity citing probable reasons that led to failure of the sale process.

The reasons cited include the government retaining 24 per cent stake and corresponding rights, high debt, volatile crude oil prices, fluctuations in exchange rate, changes in macro environment and restriction on bidding by individuals.

The Department of Investment and Public Asset Management has already prepared a fresh proposal for the Air India sale, incorporating issues like crude oil prices and exchange rate volatility, and other issues.

The government could this time around sell its entire 100 per cent stake in the Air India as it aims to conclude the sale process by December 2019.

However, a final call on the quantum of stake to be offered to investors and the right time for floating the expression of interest would be decided by the newly constituted Air India Specific Alternative Mechanism, the sources said.

Read: Domestic air traffic in August grows 3.24% year-on-year

New Delhi: A Group of Ministers (GoM), headed by Home Minister Amit Shah, on Thursday concluded without yielding results on the proposed modalities for the sale of Air India, which has a debt burden of over Rs 58,000 crore. However, ministers claimed that process have began towards disinvestment.

Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri attended the meeting.

Air India's fate hangs in balance as GoM begins disinvestment process

Speaking to ETV Bharat, Hardeep Singh Puri claimed that all issues have been taken on board and process have began towards the disinvestment of Air India.

"I am not in a position to make any announcement. Please allow the process to move forward. However, it was a productive meeting where all issues concerned were discussed. The process will commence now," Puri said.

Sources said the GoM discussed the modalities for the sale of Air India.

In 2018-19, Air India incurred losses of around Rs 7,600 crore. By the end of 2018-19, it had a debt burden of around Rs 58,300 crore. In its first term, the Modi government invited bids from investors in 2018 to buy out the government's 76 per cent stake in Air India, along with the management control. However, the process failed as investors did not put in bids.

Following that, a report was prepared by a private entity citing probable reasons that led to failure of the sale process.

The reasons cited include the government retaining 24 per cent stake and corresponding rights, high debt, volatile crude oil prices, fluctuations in exchange rate, changes in macro environment and restriction on bidding by individuals.

The Department of Investment and Public Asset Management has already prepared a fresh proposal for the Air India sale, incorporating issues like crude oil prices and exchange rate volatility, and other issues.

The government could this time around sell its entire 100 per cent stake in the Air India as it aims to conclude the sale process by December 2019.

However, a final call on the quantum of stake to be offered to investors and the right time for floating the expression of interest would be decided by the newly constituted Air India Specific Alternative Mechanism, the sources said.

Read: Domestic air traffic in August grows 3.24% year-on-year

Intro:New Delhi: The second attempt by Modi government to divest Air India officially didn't yield any result today at Group of Minister (GoM) meeting. Rather it will meet soon to take on call on it.

After the meeting Aviation Minister Hardeep Singh Puri informed reporters later that the first meeting took place between the GoM was very productive and all issues of the national carrier have been taken on board.

"I am not the spokesperson of alternative management. We are going to take decision that have to be taken in a defined period of time and the process of divestment of Air India is truly underway," the minister said.

Body:Sources associated with the meet told ETV Bharat that the GoM meeting was held to examine that what portion of the beleaguered national carrier's debt will be part of the sale.

Without revealing anything about the meet, Union Commerce Minister Piyush Goyal told reporters, "chairman of the meeting is authorised to speak but I can only say that the next Air India Specific Alternative Mechanism (AISAM) meeting will take place soon."

Conclusion:AISAM, which was headed by the Finance Minister in the first term of Modi government is now headed by the Home Minister Amit Shah. AISAM, is a panel which was formed last year to oversee the disinvestment of the national carrier.

As per the provisional figures of FY 2018-19, the total debt of Air India Ltd as on March 31, 2019, is Rs 58,351.93 crore.

The Group of Ministers (GoM) was headed by the Union Home Minister Amit Shah. Union Finance Minister Nirmala Sitharaman, Aviation Minister Hardeep Singh Puri, Union Commerce Minister Piyush Goyal and senior officials from various government ministers were also present.

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Air India disinvestment

GoM meet on Air India

Hardeep Singh Puri on Air India

Home Minister Amit shah

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