Published: Fri, March 30, 2018
Medical | By Garry George

Indian government seeks buyer for majority stake in Air India

Indian government seeks buyer for majority stake in Air India

Also, with around 37.6 per cent of the permanent employees of Air India - and almost 16 per cent of them at Air India Express Limited - expected to retire in the next five years, as pointed out in the Memorandum, the government is reportedly hoping that the new owner decides on a voluntary retirement scheme or VRS, with terms on par with their current service agreement.

The government is planning to create an employee stock ownership plan (ESOP) from its own stake in Air India (AI), Minister of State for Civil Aviation Jayant Sinha said in an interview to CNBC TV18.

The government has stipulated a net worth criteria of ₹5000 crore for parties to bid for Air India.

After the Air India office at Delhi Airport received bomb threat call on Wednesday, an Air India Dreamliner has been taken to the remote bay for thorough security checks.

The airline has a debt of over Rs 50,000 crore.

The 85-year-old Air India is also a flag carrier with strong global brand recognition and is "extremely well placed to tap the world's largest aviation market growing at 18 per cent plus rate", it says.

Air India had a fleet of 115 aircraft as of December 2017 and serves around 39 worldwide destinations.

The idea behind the AI stake sale is that the new owner of the company will hopefully revive the company and turn it profitable.

India's biggest airline, Indigo, has expressed an interest in the proposal and an undisclosed foreign buyer is also said to be looking at the deal.

Air India was founded in the 1930s and is known to generations of Indians for its Maharajah mascot.

"Along with the debt of Rs 33,392 crore and the debt reflecting lease rentals which is off balancesheet, the minimum acquisition price for Air India thus comes to be close to Rs 43,000 crore, unless the government decides to sell some aircraft" he added.

Bidding can be done as a single player or as part of a consortium.

Such conditions appear to open the playing field for everyone from SpiceJet to Jet Airways.

Given the salt-to-software conglomerate's desperation to be India's No. 1 steelmaker-it seems to have overpaid for bankrupt mills- it's unclear Tata would want to take on another big deal so soon.

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