Air India Sale Back on the Agenda

As per reports in the media, strategic sale of Air India is back on the table after a failed attempt last year. Also, this time, the government may consider 100 per cent divestment of its stake in the airline.

Last year, the attempt to sell-off AI’s 76 per cent equity could not be achieved because of the way the deal was packaged. The conditions that the new buyer would have to take over the debt of about 54,000 crore and that it cannot fire AI employees for at least a year, proved to be a dampener. No one showed interest and the deal had to be shelved. The government has been recently trying to address some of these issues. For instance, a new special purpose vehicle called Air India Asset Holding Ltd has been created to transfer part of the debt amounting to 29,464 crore as well as non-core assets and other non-operational assets of AI. This will make AI attractive for the new buyer.