GOVERNMENT offers 100 per cent stake to the prospective buyer of AIR India
THE government has announced 100 per cent state to the prospective buyer of Air India Ltd , the Mumbai headquartered national carrier, fixing March 15 as the deadline for submitting Expression of Interest. Air India may shut down without a buyer by June 2020.Air India unions demand VRS package. Ltd, Air India has about 9,400 permanent employees and 3,600 fixed-term contract staff – including 1,850 pilots and 4,600 cabin crew – with benefits such as discount air tickets and pensions. Its employees protested against the 2018 sale attempt, and it was not immediately clear if they would also resist the latest effort. The government said it will provide details on safeguarding employee interests in its final bid document. The successful bidder would win control of Air India’s 4,400 domestic and 1,800 international landing and parking slots at Indian airports, as well as 900 slots, says The Business Standard. The bidder must assume liabilities including 232.87 billion rupees in debt. Substantial ownership and effective control of the airline must remain with an Indian entity, the government also said.The potential sale of an airline kept aloft by a $4.2 billion 10-year bailout in 2012 comes as the government divests of money-losing assets to manage the fiscal deficit. The latest offer should garner significant response partly because it involves a clean exit by the government, said CAPA aviation consultancy India head Kapil Kaul.“As the entire debt excluding aircraft debt is taken out of the deal, it signals a very determined effort to exit Air India to allow taxpayers’ funds be utilised for the government’s social agenda,” said Kaul. The government in 2018 to sell 76% of Air India and offload about $5.1 billion of its debt, with terms including the retention of all employees.InterGlobe Aviation Ltd’s IndiGo and Jet Airways Ltd – which has since collapsed – initially showed interest but opted out after the terms were disclosed. Steel-to-autos conglomerate Tata Group, widely viewed as a potential suitor for Air India, also decided not to bid after deeming the terms too onerous, IT will get 100% of low-cost arm Air India Express and 50% of AISATS, which provides cargo and ground handling services at major Indian airports, the bid document showed. The buyer would also have to provide 3% of the value of the airline’s equity as stock options for permanent employees. Air India employees’ unions will meet in New Delhi to discuss proposed privatisation of the debt-laden airline..Business Today reports the emergency meet has been convened following the government’s announcement on sale of 100 percent stake in Air India.
