Listing possible as Air India looks to restructure ownership
Government plans to turn around the fortunes
of the loss-making national carrier stop short of privatisation,
according to a report in Livemint. "clearfix MT20 ipocabrd
The government is considering a new ownership structure at Air India in
an attempt to turn around the fortunes of the loss-making national
carrier, according to a
The report quotes two people familiar with the matter as saying that the proposed restructuring stops short of privatisation.
The first step involves recasting almost Rs 28,000 crore of working
capital debt that Air India owes to banks, by trading it with equity.
The next step would involve inducting professionals equipped with proven
financial and management skills. The final phase might include listing
the company.
leads the consortium of public sector banks, which have given these
loans to Air India. Air India chairman Ashwani Lohani and SBI chairman
Arundhati Bhattacharya have already met twice to discuss the plan
However, the banks, already saddled with bad debts, are proceeding with
caution.The report quoted an official as saying that the banks
would like Air India to undertake a clear roadmap to keep the airline
“sustainable” as a business, where value can be unlocked along the way.
Air India recently shortlisted three top consulting companies - McKinsey
and Co., Bain and Co., and EY - to beef up its business strategy.
The national carrier, which has the largest fleet in the country with
140 planes, has 14.6 percent of market share in the domestic passenger
market. Under a financial restructuring plan in 2012, Air India
was slated to receive Rs 30,231 crore equity infusion, 75 percent of
which it has received so far. The airline’s losses have reduced of late,
with Air India reporting a loss of about Rs 3,587 crore in 2015-16,
from a loss of Rs 5,859 crore in the previous year
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