A month ago, central government issued a Preliminary Information Memorandum inviting “EoI” (Expression of Interest) for the disinvestment of Air India, the loss making airline. The airline will divest 76 percent of it’s stake, 100 percent in it’s subsidiary Air India Express and 50 percent it it’s ground handling operations arm. But it seems like the government is struggling to find suitable takers as the last date for EoI bid submission has been extended to may 31. The initial date was may 14.
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GOI said that it will have the rights that of a minority investor as per Companies Act and as per Shareholders Agreement after the disinvestment. The ministry made it clear that the Employee Stock Ownership Plan will also be provided from governments share.
Knowing well the plight of Air India, it will be difficult to find bidders who would take Air India at a price that is profitable to the government. In the year 2016-2017 alone, Air India suffered a loss of 5765 crores. Along with the debt are other worrying factors like poor management, operational inefficiencies and much more.
With this airline privatisation at least the citizens can be assured that their money is not used to fund the sinking airline and be used for more productive purposes.
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