Air India to Launch IPO
National carrier Air India is unlikely to launch an initial public offer before 2009 until full integration of the two merged state-run airlines, but it may give stock options to employees ahead of the issue.
Civil aviation minister Praful Patel on Monday said that government would look at partial divestment of AI and an IPO could be an option.
Patel ruled out any more privatization of existing airports to modernize them, after Delhi and Mumbai. While the state-run Airports Authority of India (AAI) will modernize the existing airports, the private sector will be welcome to bid for greenfield projects.
“Fund infusion will be good for AI and bring in more accountability. There will be no privatization or complete disinvestment of the national carrier, just partial,” he said, while not giving any timeframe for this except saying that the process hinged on overall stock market conditions and AI’s own performance.
The public sector airline is estimated to have lost about Rs 4,000 crore in 2008-09 mainly on account of high fuel price in the first half of the fiscal and irrational pricing of tickets. It is working on a proposal seeking government money to revitalise itself. The country’s largest carrier by fleet size is expected to ask for Rs 1,231 crore as equity infusion and Rs 2,750 crore as soft loan from the government.
An airline official, who did not wish to be named, said the government has clarified that the company would have to put its house in order for getting financial help. Air India is restructuring its proposal following a finance ministry directive to present a sound business plan for the long-run.
“The finance ministry has agreed in principle to the equity part but have some objection to soft loan,” a government official said.
Source:- timesofindia
