air india breakup an option as modi pushes for quick sale
Last Updated : GMT 09:07:40
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

Air India break-up an option as Modi pushes for quick sale

Egypt Today, egypt today

Egypt Today, egypt today Air India break-up an option as Modi pushes for quick sale

Air India
New Delhi - Egypt Today

India is considering selling state-owned Air India in parts to make it attractive to potential buyers, as it reviews options to divest the loss-making flagship carrier, several government officials familiar with the situation said.
Prime Minister Narendra Modi’s Cabinet gave the go-ahead last month for the government to try to sell the airline after successive governments spent billions of dollars in recent years to keep the airline going.
Air India — founded in the 1930s and known to generations of Indians for its Maharajah mascot — is saddled with a debt burden of $8.5 billion and a bloated cost structure. The government has injected $3.6 billion since 2012 to bail out the airline.
Once the nation’s largest carrier, its market share in the booming domestic market has slumped to 13 percent as private carriers such as InterGlobe Aviation’s IndiGo and Jet Airways have grown.
Previous attempts to offload the airline have been unsuccessful. If Modi can pull this off, it will buttress his credentials as a reformer brave enough to wade into some of the country’s most intractable problems.
His office has set a deadline of early next year to get the sale process underway, the officials said, declining to be named, as they were not authorized to speak publicly about the plans.
The timeline is ambitious and the process fraught, with opinion divided on the best way forward: Should the government retain a stake or exit completely, and should it risk being left with the unprofitable pieces while buyers pick off the better businesses, officials said.
Already, a labor union that represents 2,500 of the airline’s 40,000 employees has opposed the idea of a sale even though it is ideologically aligned to Modi’s Bharatiya Janata Party (BJP).
Officials who have to make it happen are grappling with the sheer scale of the exercise. Air India has six subsidiaries — three of which are loss-making — with assets worth about $4.6 billion. It has an estimated $1.24 billion worth of real estate, including two hotels, where ownership is split among various government entities.
No one has properly valued the company’s various businesses and assets before, two officials with direct knowledge of the process said. Earlier this month, about $30 million worth of art, including paintings by artist M. F. Husain, went missing from its Mumbai offices, chairman Ashwani Lohani said.
“The exercise is complex and there is no easy way out,” said Jitendra Bhargava, operational head of Air India in 1997-2010. “At this juncture, selling even part of Air India is far from certain.”
Lohani declined to comment on the sale process. The prime minister’s office and the Civil Aviation Ministry also declined to comment.
A committee of five senior federal ministers, led by Finance Minister Arun Jaitley, is expected to meet this month and begin ironing out the finer details of the plan. Besides deciding on the size of the stake sale, the panel will set the bidding norms. It will also take a call on the carrier’s debt, demerger and divestment of its three profit-making subsidiaries.
Modi’s office has said the government has no business being in hospitality and travel, suggesting the prime minister wants to sell as much of Air India as possible, the officials said.
Analysts say the government may prefer to keep the airline in Indian hands. At least two potential Indian suitors — the Tata Sons conglomerate and IndiGo — have shown early interest.
In recent weeks, officials in Modi’s office and from the Civil Aviation Ministry met Ratan Tata, the patriarch of the $100 billion-a-year Tata Sons, to gauge the company’s interest in a deal, a close aide to Modi said.
Tata would be an attractive buyer for the government. The company founded and operated Air India before it was nationalized in 1953.
“Seems like Tata will come forward and make the best offer,” the aide said, adding the government would be keen to see that jobs are not lost.
Tata, however, already has two other airline joint ventures in India, and it is not clear what parts of Air India it would be interested in. A Tata spokeswoman declined to comment.
IndiGo said on Thursday it was interested in the international operations and in Air India Express, a low-cost carrier.
Modi’s office has told officials to work out exactly how much each of Air India’s subsidiaries is worth to make it easier to break up the carrier if needed, two of the officials said. The government is expected to appoint outside consultants to help with the exercise.
Anshuman Deb, an aviation analyst at ICICI Securities, said splitting the airline would maximize value for the government.
“Let us be realistic. It is very clear that a single buyer cannot buy an entire state-owned company,” said a senior official involved in the process.

Source: Arab News

egypttoday
egypttoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

air india breakup an option as modi pushes for quick sale air india breakup an option as modi pushes for quick sale



GMT 06:29 2011 Monday ,14 November

Matthew cruises to win at Ochoa Invitational

GMT 03:34 2017 Wednesday ,22 March

Tillerson to skip NATO meeting next month

GMT 13:44 2013 Friday ,15 March

Israel suppress Palestinian demonstrations

GMT 16:15 2017 Monday ,01 May

Moroccan Workers’ Syndicate

GMT 11:56 2016 Wednesday ,12 October

Toyota, Suzuki eye partnership as industry consolidates

GMT 15:42 2011 Thursday ,23 June

Express checks in with foursquare

GMT 10:49 2017 Sunday ,13 August

Car rams into crowd at violent Virginia rally

GMT 17:45 2013 Sunday ,20 October

5 Indian spices that are good for your health

GMT 08:41 2012 Saturday ,15 September

Italian magazine: will print Kate topless snaps

GMT 08:02 2012 Tuesday ,05 June

Zoe Saldana in Prabal Gurung

GMT 06:11 2012 Saturday ,15 September

Tunisia’s Media Conflict: Journalists fight for freedom

GMT 14:35 2015 Friday ,24 July

Awqaf Minister hails New Suez Canal project

GMT 16:34 2017 Thursday ,28 December

Hitler's Nazi-parade Mercedes set

GMT 11:22 2011 Monday ,10 October

Paul McCartney to play in Moscow in December

GMT 05:17 2015 Friday ,25 September

Pope expresses solidarity with Muslims after stampede

GMT 05:44 2012 Saturday ,21 April

ATV engine 95 HP

GMT 03:01 2011 Monday ,19 September

Laughter, tears at US television\'s Emmy awards

GMT 12:04 2012 Wednesday ,07 March

6 Music animation draws on 10 years of eclectic radio

GMT 01:00 2015 Sunday ,05 April

Barzani congratulates Abadi on Tikrit victory

GMT 13:24 2015 Thursday ,15 October

Tesla installs 'autopilot' update

GMT 06:17 2012 Monday ,02 January

Countries across the world celebrate the New Year

GMT 04:07 2016 Tuesday ,07 June

For new era of self-driving cars

GMT 08:21 2017 Saturday ,23 December

Saudi-Sudanese Deal to Ease Transfers

GMT 11:08 2017 Thursday ,21 December

Asian markets mostly down as tax cut euphoria wanes
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday