New Delhi, Jun 14: The government is considering listing of debt-laden Air India (AI) after the proposal for 76% strategic stake sale failed to attract any bidders, a source said.
The source in the government said various options, including possible listing of the national carrier, are being looked at. By selling shares in an initial public offering (IPO), the state can retain control of Air India and also raise cash to fund its operations, a senior government official told reporters in New Delhi, asking not be identified citing rules.
A group of ministers formed by the Ministry of Finance is considering other options as well, but is not in favor of giving control to a foreign entity, the official said.
In a setback, the government on May 31 said no initial bids were received for the proposed stake sale in AI and various options would be explored for the airline’s future.
The listing option is also being considered as there have been concerns among potential bidders about government retaining 24% stake post disinvestment. Under the proposed plan, around Rs 33,000 crore debt would have remained with AI. AI’s debt burden was about Rs 50,000 crore at the end of March 2017.
Air India has debts to the tune of Rs 50,000 crore and is surviving on a taxpayer-funded bailout. The carrier hasn’t made money since its 2007 merger with another state-run domestic operator Indian Airlines.
Following the debacle last month, the government is planning to revive the process with new guidelines, including re-examining a clause requiring a minority state stake, Subhash Chandra Garg, a senior official in the Ministry of Finance, said in an interview.