The government will retain a stake in Air India after the airline’s divestment in the hope that the new owner can unlock the true value of the airline and give a better return on the investment to the government than it is getting at present.

A clear picture on how much stake the government will retain in the divested Air India will emerge when the Expression of Interest (EoI) is released for those interested in participating in the divestment process.

The EoI is likely to be released this month, said an official source, who cannot be identified as he is not allowed to speak to the media.

The EoI will specify all details including how much stake the government wants to divest, which entities will be divested, what the liabilities of the airline are and other such details which will facilitate a bidder to take a final call on putting a bid for the state owned airline or not.

The EoI will, however, not specify the valuation of the airline, the source indicated.

Sources say that the government retaining a stake in Air India could see some dampening of interest in the valuation that is placed for the airline.

At the moment there is no clarity on whether one EoI or more than one EoI will be issued for prospective bidders.

On February 2, Jayant Sinha, Minister of State for Civil Aviation, had said that a private bidder will be allowed to pick up 51 per cent or more stake in Air India.

The Minister had added that the government is looking at putting up four different entities — the airline, Air India Express and Sats which will be one equity, the engineering company, the ground handling company and Alliance — for bidding.

“A bidder will be allowed to bid for any one or all four,” he had said.

Sources also indicated that Air India’s liabilities are over ₹50,000 crore but declined to give an exact number.

The airline also has unpaid debt in the form of unpaid charges to various airports and payment to oil companies among others which is an on-going expenditure.

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