The disinvestment of Air India is likely to get completed by December this year. Union Civil Aviation Minister Jayant Sinha said that the successful bidder will be announced by end June and the entire legal process of privatisation of Air India will be completed by December this year.
Apart from IndiGo, a foreign airline has sent a confidential letter showing interest in Air India.
The Civil Aviation Minister said the information memorandum for the proposed strategic disinvestment of Air India would be issued in the next few weeks.
“The memorandum would lay out details about various aspects, including what would be available for bidding, assets and how much stake the Government would own,” Sinha said.
According to Sinha, two formal expressions of interest have been received by the ministry so far.
As per the plan, the Air India group will be divested as four different entities and that the “information memorandum” will be issued in sometime.
On June 28, 2017, the Cabinet Committee on Economic Affairs, gave its approval for the strategic disinvestment of Air India and five of its subsidiaries based on the recommendations of Core Group of Secretaries on Disinvestment.
Giving a fillip to the divestment process, the Finance Ministry notified the Union Cabinet's decision of January this year to allow a foreign airline to pick up a stake of up to 49 per cent in Air India.
The expression of interest in Air India disinvestment has come from no-frills airline IndiGo and a foreign bidder, about whom details were not disclosed by the minister.
As part of reviving the ailing airline, the Government decided on its strategic disinvestment last year and a group of ministers, headed by Finance Minister Arun Jaitley, is working out the modalities of the stake sale.
“We are privatising Air India. That means more than 51 per cent of ownership of Air India is going to be transferred to private sector. We will be transferring control to the private sector, that means government's ownership will be 49 per cent or less,” Sinha said.
He also noted that Air India would be transferred to the private sector just like British Airways, American Airlines, lufthansa and Qantas.
According to the minister, the national carrier would be offered for bidding as four different entities.
Air India, its low-cost arm Air India Express and subsidiary AISATS would be one entity while regional arm Alliance Air would be a separate entity.
Besides, Air India Air Transport Services ltd (AIATSl) and Air India Engineering Services ltd (AIESl) would be sold separately, he said. AISATS is a 50:50 joint venture between Air India and Singapore Airlines' group entity SATS ltd.
To a query on whether he had discussions with various players in respect of Air India disinvestment, Sinha said, “I have had many discussions with many different players for Air India as well as various different entities that belong to the Air India group.”
Under the turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government, subject to meeting certain performance thresholds, over a ten-year period starting from 2012.
The airline has already received more than Rs 26,000 crore under the package. For 2018-19, the carrier has been allocated Rs 650 crore in the Union Budget.