Air India roadshow in Singapore

Latest Air India News : The government of India will start roadshows for privatisation of state-run Air India this week in Singapore with Disinvestment Secretary T.K. Pandey along with senior aviation ministry ,DIPAM Officials and Air India officials to brief the prospective buyers for complete stake sale in the airline.

The government plans roadshows for Air India Ltd in India and various other International locations as it proceeds to sell the airline. After Singapore, next location planned is London.

Air India disinvestment is likely to be delayed as the expression of interest (EoI) for bidders will be issued in the first week of January, a source in the know pointed out. The earlier plan was to issue the EoI during the current calendar, but the government is taking time to prepare an attractive deal for prospective buyers. 

As per sources, Mr TK Pandey will be in Singapore this week along with senior aviation ministry and Air India officials to meet prospective bidders, address their concerns on Air India debt position, employee issues, and start the roadshows.

It has, therefore, noted in the same tender that while the selected adviser will assist in fixing the range of the fair reserve price— considering the valuation of the Air India group based on the methods including but not limited to discounted cash flow, relative valuation, replacement cost method, among other things—the government will have the option of getting the valuation done from another agency and it will also consider the report of the asset valuer. 

The airline has five subsidiaries—Air India Express Ltd (AIEL), the low-cost subsidiary which operates to the Gulf, Middle East and South East Asia from various points in India but predominantly from Kerala; Air India Air Transport Service Ltd (AIATSL), which does ground handling; Air India Engineering Services Ltd (AIESL), which is primarily involved in the maintenance, repair and overhaul of engines and airframe; Airline Allied Service Ltd (AASL) or Alliance Air which operates regional routes; and HCI, which has two hotels in Delhi and Srinagar and Chefair Flight kitchen units in Mumbai and Delhi.

The airline also has a joint venture called AI/Singapore Air Transport Services (SATS) for ground handling activities at Delhi, Mumbai, Bengaluru, Trivandrum and Mangalore with equal equity holding. 

The merchant bankers will advise and assist the government on modalities of strategic disinvestment and the timing, and the positioning of the strategic sale. 

The bidder needs to have at least five years of experience in providing similar advisory services for disinvestment, strategic sale, merger and acquisition activities, private equity transaction etc., and should have advised, handled and successfully completed at least one transaction of merger/acquisition/takeover/strategic disinvestment/private equity transaction of the size of Rs4,000 crore or more between April 2012 and 30 June 2017

There are possibilities now for Air India Expression of Interest to be floated this month after this meeting. The national carrier has a debt of Rs 57,000 crore and the bids will be invited for 100 per cent stake.

Once the roadshows start, this will mark the start of privatisation of Air India at the ground level, sources said.

Civil Aviation Secretary Pradeep Singh Kharola and Air India management have been discussing with the trade unions assuring them of security even after privatisation. The unions are opposed to privatisation fearing job losses.

The Cabinet Committee on Economic Affairs (CCEA), in a meeting on 28 June, gave an in-principle approval for the strategic disinvestment of Air India and its five subsidiaries.

As part of efforts to clean up the balance sheet of Air India before stake sale, around Rs 30,000 crore of its debt is proposed to be repaid by way of proceeds from the issuance of bonds by its special purpose vehicle, Air India Asset Holding Ltd (AIAHL).

Inside Air India One- Narendra Modi Aircraft

Reference : IANS/Outlook