India's Civil Aviation Secretary R.N. Choubey has denied rumours that government is planning to sell its 51% stake in Air India (AI, Delhi International), reports Bloomberg. Citing informed sources, the Bloomberg report says that initial presentations have been made to the Finance Minister and to the office of the Prime Minister about the sell-off.
Air India has suffered poor financial performance for the past several years, surviving on a government bailout of INR300 billion (USD4.3 billion) granted to it in 2012. The national airline currently faces a debt of around INR460 billion (USD6.7 billion), but posted an operational profit last year for the first time in over a decade.
In mid-2016, Air India chairman Ashwani Lohani opened talks with creditor banks over the possible conversion of INR100 billion (USD1.49 billion) worth of debt to equity under the Reserve Bank of India's Scheme for Sustainable Structuring of Stressed Assets, or S4A, however nothing seems to have happened toward this end.
Speaking to Indian business news site Mint, Dhiraj Mathur, partner and leader (aerospace and defence) of PwC India, indicated that a sell-off would be a good strategy. "There is no reason for the government to continue to own and control Air India," Mathur said.
Just last month, Air India shortlisted three major firms to help it to develop and implement a viable business plan for its future operations. Every avenue appears to be being explored to keep the embattled national carrier in the air.
