New Delhi: A Home Minister Amit Shah-led ministerial panel will discuss as many as 10 major issues, including further dilution of FDI rules, transfer of debt to the SPV and fixing reserve price as it holds its first meeting to decide almost complete exit of the government from Air India.
Employee package, including medical facilities to nearly 40,000 current and retired employees would also be on the agenda for discussion in the crucial meeting.
Official sources said that eligibility criteria of potential bidders would also be eased to ensure new companies and High Networth Individuals (HNIs) could also participate in the sale process.
As much as Rs 10,000 crore of additional debt, over and above Rs 29,464 crore decided earlier, is proposed to be moved to Air India Assets Holdings Ltd (AIAHL), the special purpose vehicle of Air India for transferring part of its debt and assets.
Air India currently has a debt of nearly Rs 60,000 crore which includes long-term loan for aircraft purchase and working capital.
“Only Rs 18,000 crore of debt would remain on the books of Air India when expression of interest (EoI) would be invited and preliminary information memorandum (PIM) would be issued,” said an official aware of the disinvestment plan.
Various subsidiaries of the disinvestment-bound airline are being shifted to the SPV which would be sold separately to repay debt. Air India Air Transport Services Limited (AIATSL), one of the subsidiaries, has already been shifted to the SPV on net worth basis.
But what suggests that sale of Air India and its subsidiaries would not be easy, the EoI submission deadline for AIATSL has been extended thrice with the last being September 16, 2019.
There are issues related to employees and provident fund (PF) as the airline maintains two PF trusts, one for the employees of erstwhile Indian Airlines and the other for Air India.
The Ministerial panel which includes Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri would also take up the issue of staff deployed on inter-entity deputation within Air India group companies.
Among other major issues, push for Air India sale would be further relaxing the FDI rules to attract foreign airlines such as Singapore Airlines, Emirates and Qatar Airways.
The present rule which caps maximum investment by a foreign airline in domestic carriers at 49 per cent is considered one of the key reasons for failed disinvestment bid last year.
The present rule allows 100 per cent FDI into an Indian carrier but foreign airlines’ ownership is capped at 49 per cent. Further, the investors have to also comply with the clause of substantial ownership and effective control (SOEC).
After failing to find a bidder in its previous term, the Modi 2.0 government is working on war-footing to sell Air India to a private player.
The government had last year set the ball rolling for Air India’s disinvestment offering 76 per cent equity stake to private parties but the plan proved to be a damp squib with not a single private company turning up to submit EoI. This forced the government to put off the sale process.