Air India Stake Sale Plan To Be Revisited After Oil Prices, Forex Rates Stabilise
The government today said it would revisit the Air India disinvestment plan after oil prices, foreign exchange and other global economic indicators stabilise.
While asserting that the government remains committed to the disinvestment of Air India, Union Minister Jayant Sinha told the Rajya Sabha that the national carrier has shown “considerable improvement” in operational and financial parameters in the recent past.
The government's proposal to sell 76 percent stake as well as transfer management control of the debt-laden airline to private players failed to take off in May.
Sinha said transaction advisor EY had cited 24 percent government stake and corresponding rights, and high amount of allocated debt as the reasons for not receiving any bids.
Other probable reasons cited by EY were "changes in macro environment, individuals not being allowed to bid, profitability track record, and bidders not being able to form a consortium within a given time period", according to written replies provided by the minister.
In view of volatile crude prices and adverse fluctuations in exchange rates, the present environment is not conducive to stimulate interest amongst investors for strategic disinvestment of Air India in immediate near future. The issue would be revisited once global economic indicators, including oil prices and foreign exchange conditions stabilise.Jayant Sinha, Minister Of State For Civil Aviation
The stake sale plan did not attract any bidders when the deadline for submitting Expression of Interest ended on May 31 and EY was the transaction advisor.
Further, the Minister of State for Civil Aviation said near- and medium-term efforts would be initiated to improve Air India's performance.
He also said the Air India Specific Alternative Mechanism (AISAM) would separately decide the contours of the mode of disposal of subsidiaries -- Air India Engineering Services Ltd (AIESL), Air India Air Transport Services Ltd (AIATSL) and Airline Allied Services Ltd (AASL).
Debt-laden Air India's losses after tax stood at Rs 5,765.2 crore in 2016-17.
The national carrier received an equity infusion of Rs 27,195.2 crore till end of financial year 2018 under a bailout package approved by the previous UPA government in 2012.
As part of turnaround strategy for the carrier, Sinha said a number of steps have been initiated to cut costs and losses. These include setting up of a route rationalisation committee to ensure revenue maximisation by continuously looking at load factors, revenue yields and competitor fare structure.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
