In her Union Budget 2021-22 speech on February 1, Finance Minister Nirmala Sitharaman had set an ambitious divestment target of Rs 1.75 crore.
Union Civil Aviation Minister Hardeep Singh Puri on March 27 said Air India will be '100 percent disinvested', saying the choice is only between disinvestment and closing down the airline company. The minister confirmed that the government is determined and there is no hesitation in taking the disinvestment decision.
Puri, while speaking about the disinvestment process of the debt-ridden national carrier, said the government has decided to inform the shortlisted bidders that the bids have to come in within 64 days.
"We've decided that Air India will be 100% disinvested. Choice isn't between disinvestment and non-disinvestment, it's between disinvestment and closing down. Air India is a first-rate asset but has an accumulated debt of Rs 60,000 crore. We need to draw the slate clean," news agency ANI quoted the civil aviation minister as saying.
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"I don’t have the capacity to keep going to Nirmala ji and say please give me some money,” he added in an apparent reference to seeking funds to run Air India from the finance minister.
Union Finance Minister Nirmala Sitharaman had allocated Rs 2,268 crore for a special purpose vehicle set up as part of the financial restructuring of Air India while tabling the Union Budget for FY 2021-22. She had made it clear that the disinvestment of Air India and Pawan Hans would be completed in the next financial year.
Earlier in December 2020, Air India had received several initial bids for strategic disinvestment after the government tweaked some rules to attract private investors for the debt-laden carrier. The government seeks to sell 100 percent equity holding in Air India.
Recent reports suggest that SpiceJet Ltd promoter Ajay Singh has partnered with Ras Al Khaimah Investment Authority and Ankur Bhatia, promoter of Delhi-based Bird Group, to bid for a 100 percent stake in Air India. Tata Sons has also reportedly bid for Air India.
Meanwhile, the Union government has provided the national airliner with a guarantee support of Rs 964 crore so far in 2020-21, which has helped it raise new working capital loans from banks. Also, the government has extended the existing guarantee of Rs 6,693 crore for working capital requirements.