Govt likely to set October deadline for cash-strapped Air India sale

The build-up to Air India privatisation has taken off in full swing with the Union Budget announcing it as the centrepiece of divestment this year. The government is targeting October as the deadline for announcing the deal.

Not leaving anything to chance after a failed attempt earlier, the government has shortlisted the potential bidders, with the Tata group on top for its interest in aviation. Sources in the know said the government would initiate talks with businesses, including Tatas, shortly for divesting its stake in the national carrier.

The proposed dialogue with potential buyers will coincide with the government procedure of issuing bid documents for expression of interest sometime this month.

“Now that the finance minister has committed in the Budget, we will start approaching prospective bidders,” said a source close to the development. While pointing out that the Tatas will be approached first, he said, “They have a history with aviation and they know how to run an airline.”

“In view of the current macroeconomic parameters, the government would not only reinitiate the process of strategic disinvestment of Air India, but would offer more central public sector enterprises for strategic participation by the private sector,” Finance Minister Nirmala Sitharaman had said in her Budget speech on Friday.

The government will soon reconstitute the Air India Specific Alternative Mechanism (AISAM), following which a new bid document will be issued. The AISAM is charged with giving approvals at every step of the Air India divestment process, with only the blanket approval given by the Union Cabinet.

Air India