The Indian government, which is keen to sell off the troubled state-owned airline Air India, has decided to sell off its stake completely in order to address investor concerns.
The government may sell its residual stake to the Life Insurance Corporation of India (LIC) and other financial institutions, Business Standard reports.
The move is expected to help the new buyer run the airline as any other competitive entity. Potential bidders and sector analysts had earlier argued that any Indian government holding in Air India might discourage investors.
As part of the privatization process, the government decided to disinvest 76% equity stake in Air India Ltd, along with Air India’s 100% holding in its low-cost subsidiary, Air India Express Ltd, as well as 50% in its ground-handling arm AISATS, an equal joint venture with Singapore Air Transport Services. It has ground-handling activities at New Delhi, Mumbai, Bangalore, Thiruvananthapuram and Mangalore.
It will then offer an employee stock-ownership plan to its permanent staff. After that it will hold discussions with LIC and others to sell the remaining stake.
The state-owned airline has an operating fleet of 142 aircraft – 65 Airbus 320s, 15 Boeing 777s, 24 Boeing 787s, 23 Boeing 737-800s, 11 ATRs and four Boeing 747s.