After a failed bid to revive the ailing national carrier, the ministerial panel on Air India disinvestment has decided to sell the government's 100% stake in the airline's subsidiary Air India Air Transport Services Ltd (AIATSL) by March.
The Alternative Mechanism, a ministerial panel headed by finance minister Arun Jaitley, on Tuesday cleared a proposal for 100% strategic sale of Air India's ground handling subsidiary AIATSL in the current fiscal. The panel also decided to go ahead with the disinvestment of Pawan Hans.
The government has been working on the ways to revive the fortunes of Air India, which is reeling under a debt burden of around Rs 50,000 crore.
It was decided that the government would hive off AIATSL to a special purpose vehicle (SPV), which has already been incorporated. The Expression of interest (EoI) document would be issued after transfer of AIATSL to the SPV.
"The Alternative Mechanism has approved EoI together with Preliminary Information Memorandum (PIM) for Air India Air Transport Services Ltd (AIATSL) sale," aviation secretary R N Choubey told reporters after the meeting in the national capital. "EoI and PIM are going to be issued shortly," he added.
Proceeds from the sale of AIATSL would be used to pay off part of Air India's debt.
The meeting here was attended by Jaitley and civil aviation minister Suresh Prabhu and the secretaries for aviation and Department of Investment & Public Asset Management (Dipam), among others.
AIATSL was incorporated in June 2003 with the objective of carrying out the business of providing all types of services at airports. Industrial and business operations of AIATSL include rendering airport ground handling services such as those pertaining to passenger, ramp, security and cargo for Air India.
The latest strategic sale plan follows the decision by the ministerial panel in June to make Air India competitive by way of cutting down debt and raising resources by selling land assets and other subsidiaries.
The ministerial panel had decided to revive Air India after the government's strategic stake sale offer failed to attract any bidders earlier this year.
The government had originally proposed to offload 76% stake in the national carrier as well as transfer the management control to private players.
...& ANALYSIS
- The government would hive off AIATSL to an SPV, which has already been incorporated
- Expression of interest (EoI) would be issued after transfer of AIATSL to the SPV
