Air India kickstarts process of disinvestment internally, hopes to find bidder
The PSU is forming five committees to meet the guidelines laid out by the Ministry of Civil Aviation.
National carrier Air India has set the ball rolling internally for the process of disinvestment that the government had announced of 'in-principle' after the meeting of Cabinet Committee on Economic Affairs on June 28.
The government hopes to find a bidder and complete the process of sale of Air India and its five subsidiaries by mind-2018.
In an office order dated November 18, Rajiv Bansal, CMD of Air India had mentioned that the PSU is forming five committees to meet the guidelines laid out by the Ministry of Civil Aviation.
The committees that will work on every aspect of divestment will cover Finance, HR, P&F Department, Secretarial & Procedural matters including formalization of relationship with subsidiary companies & future business plan of subsidiary plans, and finally, Bilateral Slots, other Commercial Arrangements and Issues.
V Hejmadi, Director, Finance, and S Venkat, Advisor, Finance will be overseeing and coordinating between all the afore-mentioned teams and reporting back on a fortnightly basis to CMD Rajiv Bansal.
Air India has also appointed SBI Caps to "hand-hold Air India during the divestment process", Bansal said in the office order.
"They will be assigned the responsibility of preparing 3/5 years business plans for subsidiary companies to be divested, obtaining approvals/NOC from the consortium of banks for the transfer of Real Estate Properties and other security besides assisting/guiding Air India on other divestment matters", he added.
The government currently is in the process of appointing a Transaction Advisor, an Asset Valuer and a Legal Advisor to guide it through the process of sale.
For the first two positions, the government has received applications from 7 firms including KMPG, BNP Paribas, Rothschild India Pvt Ltd and EY. Similarly, for the latter, the government has again received applications from 7 firms including Cyril Amarchand Mangaldas and Hammurabi and Solomon.
After the Cabinet Committee on Economic Affairs decided in end-June to privatize Air India, a ministerial committee headed by Finance Minister Arun Jaitley and a committee of secretaries have been meeting regularly to identify a universe of bidders for the Maharaja.
Air India's debt burden is estimated to be approx. Rs 50,000 crore. The airline was sustaining itself on Rs 30,000 crore bailout package announced by the previous UPA regime after it suffered massive losses.