by Harish Gupta, National Editor, Lokmat Group
Air India Divestment process to begin next month
Chairman Lohani task cut out
New GoM formed under Amit Shah
Harish Gupta
New Delhi, July 31
The Air India's divestment process will start next month and fresh bids under the new terms will be invited in October.
Ashwini Lohani, Chairman and Managing Director (CMD) of AI Ashwini Lohani is working overtime to off-load the huge loss making flag carrier at the earliest.
The AI's operating loss is bigger than that at all the private airlines put together during the last financial year 2018-19. The total operating loss of Air India alone losing Rs 4,330 crore during 2018-19. Despite an increase in operating revenue, Air India’s higher operating cost have resulted in losses.
Ashwini Lohani is struggling to bring down this operating cost of the loss making career.
The proceeds from disinvestment will go into paying off the debt of the SPV. The remaining debt of Rs 28,887 crore is going to be set off by the new buyer. When the first bid of divestment failed, the government wanted the buyers to take over Rs 33,392 crore of debt and liabilities of AI and Air India Express as part of debt reallocation. But there were no takers and the efforts failed.
Despite these plus points, the government might find it daunting to divest the Air India.
When Lohani retired as Chairman of the Railway Board, Prime Minister Modi specially chose him for the coveted post as Chairman Air India so that he takes the hard decision to divest it within the time frame that the PM re-constituted Air India Specific Alternative Mechanism (AISAM), a high-powered ministrial committee headed by Union Home Minister Amit Shah. Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardip Puri and Commerce & Railway Minister Piyush Goyal are other members.
The government has modified several terms including divestment of upto 95% ownership while retaining 5 per cent for the employee stock option. The new buyer can sell the airlines to merge with anybody or reverse merge and sale to others.
If reports are to be believed, Ashwini Lohani's task is cut out to divest by February 2020 and acquire a new mission.
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