The Centre’s plans to shed stake in Air India, the national carrier, appear set for take off , if a Cabinet note is anything to go by.

BusinessLine learns that the government is unlikely to allow a foreign investor to participate in the process, and that it may take over a significant portion of the airline’s ₹52,000-crore debt.

According to the note, the government is also said to be considering a “strategic sale”, which could see it give up a portion of its equity along with management control, or even divest its entire stake in the airline.

The Cabinet note has been sent for inter-ministerial circulation.

According to sources, while the Cabinet will take a final call on the matter, there is no clarity yet on when the decision will come.

It is understood that the Prime Minister’s Office has insisted that no foreign investor be allowed to buy a stake in Air India. According to government regulations, domestic airlines can accept foreign direct investments of up to 49 per cent from a foreign airline. Singapore Airlines thus has a 49 per cent stake in Vistara, in which Tata Sons holds the remaining 51 per cent. Similarly, Malaysia-based Air Asia Berhad is invested in Air Asia India. Tata Sons has a stake in this low-cost airline, also.

Air India has a debt of ₹52,000 crore, which includes ₹20,000 crore of aircraft-related and ₹32,000 crore of working capital debt. According to sources, the government is likely to take over half the working capital debt as part of its divestment plan. The airline has a fleet of 105 aircraft. As on March 2017, its assets stood at about ₹40,000 crore.