The government on Monday announced sale of 100 per cent stake in debt-laden Air India as it issued the preliminary bid document for the strategic disinvestment and has set March 17, as the deadline for submitting expression of interest.
As part of the strategic disinvestment, Air India would also sell 100 per cent stake in low-cost airline Air India Express and 50 per cent shareholding in joint venture AISATS, as per bid document issued on Monday.
Management control of the airline would also be transferred to the successful bidder.
This is the second time in less than two years that the government has come out with proposal for selling stake in Air India, which has been in the red for long.
The government has set March 17, as the deadline for submitting the expression of interest (EoI).
AISATS is an equal joint venture between Air India and Singapore Airlines. It offers ground handling services.
Air India also has interests in Air India Engineering Services, Air India Air Transport Services, Airline Allied Services and Hotel Corporation of India.
These entities are in the process of being transferred to a separate company — Air India Assets Holding Ltd (AIAHL) — and would not be a part of the proposed transaction, the document said.
According to the document, debt of Rs 23,286.5 crore would remain with Air India and Air India Express at the time of closing of the disinvestment.
The remaining debt would be allocated to AIAHL.
A person in the know of PIM details said staff would be given shares on discount under Employee Stock Option Programme (ESOP).
Air India staff will be offered three per cent of the airline’s total shares in the government’s disinvestment process.
About 98 crore shares would be set aside under the ESOP, the person said.
As on November 1, 2019, Air India and Air India Express had 16,077 employees on their rolls, including permanent people.
Meanwhile, Air India Chairman and Managing Director Ashwani Lohani said Air India does not have “excess staff” and the retiring employees’ medical benefits issue is being sorted out.
On the Air India stake sale, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey, said the proposed Air India disinvestment is structured on “very sound principles”.
EY is the transaction adviser for Air India disinvestment process.
In 2018, the government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players. However, there were no bidders.