sources said that the government is nearly decided over a complete exit
and making necessary change in eligibility criteria and other terms to
align it with the needs of the potential investors.
decisions left are fixing the fair price of Air India and handling the
debt. Then contours of the disinvestment and retaining employees are
other issues," said an official.
The meeting schedule of the
group of ministers is yet to be decided but is expected shortly. Apart
from Shah, the ministerial panel has Finance Minister Nirmala
Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil
Aviation Minister Hardeep Singh Puri as the members.
Modi government had dropped the disinvestment plan citing adverse
operating environment with global crude prices rising and rupee
weakening against the dollar. The investor sentiment was also tepid.
Above all, an impending general election did not make political sense to
go for disinvestment of Air India which is generally associated with
the country's pride and sometimes termed as "jewel of the nation."
the country's aviation environment has changed in the last one year
with Jet Airways out of the scene now, experts see prevailing conditions
better than May, 2018 when not a single bidder showed interest for Air
India at EoI (expression of interest) level.
Kapil Kaul, CEO
(South Asia) of Sydney-based Centre for Asia Pacific Aviation (CAPA)
sees the current operating and investment environment better than last
year. He sees investors showing interest for the national carrier
provided some of their issues are sorted out.
closure, demand-supply dynamics are more stable. Oil is expected to
remain under $60 and rupee around 71-72 which indicates favourable
trading conditions compared to last fiscal," Kaul said.
"Globally, funds are available for the right project subject to favourable conditions for investment," he added.
India has a total debt of about Rs 60,000 crore. The cumulative loss of
the national carrier is to the tune of Rs 70,000 crore. In the
financial year ending March 31, 2019 the airline is estimated to have
reported a loss of Rs 7,600 crore.
In an earlier decision, the
government had decided to transfer debt of Rs 29,464 crore along with
other non-core assets to the newly-created SPV to attract bidder
interest for the carrier.
Asked if there would be enough investor
interest for Air India this time around, Dhiraj Mathur, Partner, PwC
said that it certainly gives a good opportunity to anyone planning to
enter Indian aviation. But he sounded cautious about foreign entities
lining up for the carrier.
"With Jet Airways almost out of the
picture now, anyone with aspirations of entering the large and growing
Indian market, Air India is a very attractive option. Now, the issue is
fair price. Without going into numbers and the books it is difficult to
assess the floor price," he said.
Mathur noted that a lot of
things have changed from then (when the bid for Air India was invited
early last year) and now especially on the global market front.
various reasons, including the looming trade war there is a lot more
uncertainty now than there was earlier. But having said that I am
positive. Certainly the fundamental value of Air India has not
diminished and it remains a good asset. It is a very good opportunity
for anyone who wants to enter the Indian market," he added.