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Wednesday, 11 September, 2019, 10 : 05 AM [IST]
GoM to likely decide on Air India’s reserve price for sale

Going whole hog to sell Air India this time after the government's failed bid, the Group of Ministers (GoM) led by Union Home Minister Amit Shah is expected to decide the reserve price of the national carrier and dealing with its large debt.

Among other issues are golden handshake to staff reaching a certain age and extending medical facilities to those who have already retired or would retire in years to come.

Official 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. "Major 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 GoM 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.

Last year, the 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".

While 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.

Air India has a total debt of about INR 60,000 crore. The cumulative loss of the national carrier is to the tune of INR 70,000 crore. In the financial year ending March 31, 2019 the airline is estimated to have reported a loss of INR 7,600 crore.

In an earlier decision, the government had decided to transfer debt of INR 29,464 crore along with other non-core assets to the newly-created SPV to attract bidder interest for the carrier.

 
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