Government on 'wait and watch' mode in Air India stake sale: Report

MORE than a month after the proposed strategic disinvestment of Air India failed to take off, the government has now said that it will "wait and watch" for the next three-four months before taking a call on disinvestment of national carrier Air India due to prevalent market condition specially high fuel prices, Union Minister Nitin Gadkari said on July 4.
The government's proposed stake sale in Air India failed...
to attract any initial bidder when the deadline for bidding ended on May 31.
"Market condition is not right for Air India disinvestment now. In view of this we are keeping a wait and watch policy for the next three to four months," Gadkari said. He said given the high fuel prices at present, the viability of the move will be judged before going ahead with the disinvestment process.
Earlier on July 4, Finance Minister Piyush Goyal said that the government will try on its own to make Air India profitable so that the airline will become more attractive for disinvestment.
“… we will try to make Air India a profit making company on our own. Then, we will have more options of disinvestment. It will become more attractive for disinvestment,” Goyal told reporters here. According to him, the alternative mechanism would also look at the plan of action being prepared by the Air India CMD.
Goyal and Gadkari are among the ministers who are part of the alternative mechanism that was constituted for Air India disinvestment.
Under the Air India disinvestment plans, the government was to sell 76 per cent stake in the national carrier along with complete divestment of low-cost arm Air India Express and a 50 per cent stake in Air India SATS Airport Services Pvt Ltd -- an equal joint venture with Singapore-based SATS.
Earlier, Minister of State for Civil Aviation Jayant Sinha had said the government was committed to strategic disinvestment of Air India. "What the modalities are, what the circumstances are, we have to monitor and evaluate as we go along," he had said.
At the end of March 2017, the carrier had a debt burden of around Rs 48,877 crore. Of the total amount, Rs 17,360 crore was related to aircraft and Rs 31,517 crore pertained to working capital loans.
Under the proposal, the government was to sell 76 per cent stake in the national carrier along with complete divestment of low-cost arm Air India Express and a 50 per cent stake in Air India SATS Airport Services Pvt Ltd — an equal joint venture with Singapore-based SATS. However, the proposal failed to attract any bidders when the deadline ended on May 31.
Last month, the Civil Aviation Ministry had said the government was committed to strategic disinvestment of Air India. At the end of March 2017, the carrier had a debt burden of around Rs 48,877 crore. Of the total amount, Rs 17,360 crore was related to aircraft and Rs 31,517 crore pertained to working capital loans.