The Tata group is discussing the possibility of buying a stake in debt-laden Air India, even as the government is examining various options – including full or partial privatisation – to revive the national carrier, sources said.
There have been internal meetings as well as meetings with government representatives, sources added.
However, when contacted, a Tata group spokesperson said:
We don’t comment on speculations.
One scenario being discussed is that the government will retain a 51 percent stake, while the other 49 percent will be sold to private players, which could include foreign players.
Sources said that in such a situation, the government would have a majority stake but operational control would be with the minority stakeholder
Air India is riddled with debt amounting to Rs 50,000 crore, and is barely staying afloat after a Rs 30,000 crore bailout package was facilitated by the previous United Progressive Alliance regime.
Earlier this month, Finance Minister Arun Jaitley made a strong case for the sale of the airlines, questioning if it was fair to expect taxpayers to shell out Rs 55,000-60,000 crore on a national carrier that had “just 14 percent of market share”.
Speaking to CNBC TV18, Jaitley said that the government should have pulled out of the airlines 15 years ago. He added that he was in agreement with the NITI Aayog’s pitch to privatise the airlines.
In the meantime, the civil aviation ministry has raised concerns over the plan to privatise Air India, a senior government official told BloombergQuint requesting anonymity.
The ministry has concerns on how Air India’s debt will be restructured, the fate of the voluntary retirement scheme, and fleet management. The ministry is still in favour of reviving the debt-ridden national carrier.
The talks to privatise Air India had reached an advanced stage, but the proposal is being looked at afresh, the official said.
Clarity on the sale would emerge in some time after the Union Cabinet takes up the proposal. The government is looking to offload a controlling stake after taking over a portion of its debt, the official said.
(with inputs from PTI)