The government has appointed consultancy firm EY as the transaction advisor for the strategic divestment of its stake in national passenger carrier Air India.
According to the Minister of State for Civil Aviation Jayant Sinha on Friday, the firm has been appointed to aid the government in the strategic divestment of the national carrier.
In September, the Department of Investment and Public Asset Management’s (DIPAM) had invited bids for the role of advisors to guide the government on the financial and legal issues associated with the strategic disinvestment.
On the likely type of stake sale, Sinha said: “We will be offering an integrated airline through the bidding process. Both domestic and international operations will be divested as one entity.”
The development assumes significance as the budget passenger carrier IndiGo had earlier evinced interest in buying the airline’s international operations and its subsidiary Air India Express.
On the airline’s subsidiaries, Sinha said that a process to identify subsidiaries to be offered separately is presently underway.
Till now aviation industry majors SATS, Bird Group and Celebi have shown interest in buying Air India’s ground handling unit.
Currently, a ministerial group — Air India-specific Alternative Mechanism — headed by Finance Minister Arun Jaitley is looking into the modalities to divest loss making Air India.
The group has been mandated to decide on key issues such as treatment of Air India’s debt and hiving-off of its assets.
The airline, which is under massive debt burden of Rs 50,000 crore, had posted an operating profit of Rs 105 crore in 2015-16.
For the last fiscal (2016-17), the company was expected to report an improved operating profit margin.
The national flag carrier in April 12, 2012, got a new lease of life when the then UPA government had approved a Rs 30,000-crore turnaround and financial restructuring package spanning up to 2021.