The Center expects to receive financial offers by September 15
Financial offers for Air India are expected to be received by September 15 this year, Civil Aviation General VK Singh of MoS told Lok Sabha on Thursday. Responding to anonymous questions from Congressman Manish Tewari and TMC MP Mimi Chakraborty regarding the privatization and divestment of the Indian national carrier. In 2018, the Union government attempted to offload a 76% stake and management control of Air India, which has soaring debt, but did not secure a single bidder.
On January 27, 2020, it issued a preliminary information memorandum to invite interest in the strategic divestment of 100% and 50% of the Centre’s stake in Air India Express Ltd and Air India SATS respectively. Due to the COVID-19 pandemic, the deadline for submitting EOIs has been extended to December 14, 2020. Singh said a special purpose vehicle has been put in place for the storage of non-essential assets of Air India Limited.
He added: “Air India owns movable and real estate assets. With the divestment of Air India Limited, it is proposed that the movable assets be transferred to the new owner of Air India. The real estate assets are monetized by Air India to offset the debts of Air India Limited. ”
The Center unveils its divestment objective
Presenting the Union budget 2021-22 in February earlier this year, Union Finance Minister Nirmala Sitharaman announced that the divestment target for the 2021-22 fiscal year is Rs.1 , 75 lakh crore. In accordance with the Centre’s new divestment policy, all public sector enterprises in all but 4 strategic sectors will be privatized. She also revealed that the IPO of LIC will soon be brought for which the necessary modifications will be introduced.
In addition, she said that two other public sector banks besides IDBI and a general insurance company will be taken for divestment in 2021-2022 itself. The Union finance minister said NITI Aayog has been invited to work on the next list of central public sector companies for strategic divestment. In addition, Sitharaman said that a central fund incentive package will be given to states to encourage them to speed up divestment.
Union Finance Minister Nirmala Sitharaman said: “Despite COVID-19, we have continued to work on strategic divestment. A number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, Bharat Earth Movers Limited, Pawan Hans, Neelachal Ispat Nigam Limited, among others, will be completed in 2021-2022. In addition to IDBI Bank, we are proposing to take over two public sector banks and a general insurance company during the year 2021-2022.