New Delhi: Preparing for strategic disinvestment, national carrier Air India has roped in SBI Caps to advise on the future course and has constituted five teams to work on various aspects of the stake sale process.
As part of efforts to revive the loss-making airline, the government has decided on strategic disinvestment and the modalities are being worked out. Against this backdrop, Air India has constituted five project teams headed by senior officials to deal with various aspects of the disinvestment.
Besides, SBI Caps would help the carrier with disinvestment matters, including preparing business plans for subsidiaries that would be divested.
In a communication, Air India CMD Rajiv Bansal said it is necessary to constitute various teams to work aggressively with regard to the timelines laid by the ministry, so that the the governments objective is achieved in a “time-bound manner”.
The “disinvestment of Air India and its subsidiaries has commenced and the transaction advisor, legal advisor and asset valuer are in the process of being appointed”, as per the communication dated November 18.
One team has been constituted for finance, human resources and P&F (Properties & Facilities) Department. Secretarial & procedural matters, including formalisation of relationship with subsidiary companies & future business plan of subsidiary companies would be taken care of by another team. There would also be a team for bilateral slots, commercial arrangements and issues.
“SBI Caps is also being appointed to hand hold Air India during the divestment process,” the communication said. Among others, SBI Caps would prepare 3-5 year business plans for subsidiary companies to be divested, help obtain approvals from the consortium of banks for the transfer of real estate properties and other security.
Besides, it would assist Air India on other divestment matters. The airline is staying afloat on taxpayers money and the airline has a debt of over Rs 50,000 crore.
On June 28, the Cabinet Committee on Economic Affairs (CCEA) had given its in-principle for strategic disinvestment of Air India and five of its subsidiaries. Subsequently, an Air India-specific Alternative Mechanism was set up to guide the process.
The ministerial group is looking into treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries, among other aspects.