June 14: The Central government is planning to revise the structure of its Air India disinvestment process after the national carrier failed to attract an Expression of Interest (EoI) from buyers. According to newly emerged report, the government will be re-examining the privatisation process including the clause for residual stake.
The government is considering various options at present and is ready to forgo its 24% stake in the company as proposed earlier. Under the previous requirement, buyers were allowed to buy only 76% stake in the company, and this was cited as one of the prime reason for the lack of interest from buyers.
Despite receiving around 160 queries from potential buyers, the AI stake sale failed to generate any Expression of Interest from them. Besides, anxieties prevailing over the actual level of debt and liabilities of the national carrier also put down the interest among buyers.
The new proposal with an alternate mechanism will be prepared by a committee of secretaries, led by the cabinet secretary. Additionally, the government may also bring some relief to the final buyers by bringing some of the enterprise’s prime real estate under the strategic sale.
The lack of progress in the disinvestment process has given a big blow to Air India. The national carrier is yet to pay its close to 1100 employees the salary for the month of May. Staffs were informed through letters that the disbursement of salaries for the month of May 2018 had been delayed, with the payment likely to be made on June 15.
Air India is also reported to have invited bids from financial institutions from within the country and abroad for a government-guaranteed short-term working capital loan of Rs 1000 crore to be drawn in June. According to persons close to the matter, Air India is losing close to Rs 15 crore per day. The total debt of the carrier stands at Rs 48,781, while its overall losses stands at Rs 5765 crore.