India sweetens terms for sale of indebted national airline

Marco Green
January 27, 2020

AISATS is an equal joint venture between Air India and Singapore Airlines and offers ground handling services.

As on November 1, 2019, Air India and Air India Express had 16,077 employees on their rolls, including permanent people. In the first attempt in 2018, during the first tenure of the Narendra Modi government, about 76% stake was offered. The entire company will be sold but effective control needs to stay with Indian nationals, and bidders would need to accept a little more than a third of Air India's debt - down from two-thirds the last time around when not a single suitor could be found.

On Monday the sale of 100 per cent stake in debt-laden Air India was announced by the government as it issued the preliminary bid document for the strategic disinvestment with the deadline for submitting an expression of interest set as March 17. The remaining debt would be allocated to Air India Assets Holding Ltd (AIAHL) which will not be a part of the proposed transaction. As part of the strategic disinvestment, Air India will also sell 100 per cent stake in low-priced airline Air India Express and 50 per cent shareholding in AISATS, a joint venture between Air India and Singapore Airlines that offers ground handling services. "Due to accumulated debt of ₹60,000 crores, Air India's financial position can be described as "very fragile".

"When governments don't have money this is what they do".

A large number of the twitterati has come out in support of Swamy's view that auctioning off "family silver" was unacceptable, especially when the airline was making great efforts to come out of the red. Govt of India has no money, growth is less than 5% and millions of rupees outstanding under MNREGA.

Other reports by Click Lancashire

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