AI, IA disinvestment to be delayed

AI, IA disinvestment to be delayed
DEV CHATTERJEE

MUMBAI, AUG 26: The disinvestment of national carriers, Air-India and Indian Airlines is set to get delayed with the government making it clear that it will not sell any public sector unit (PSU) `in a hurry'.

Merchant banking sources say that the `expression of interest' advertisements of both the loss-making PSUs have been delayed which was supposed to be published in the first week of August. However, the government is taking its own time to vet the advertisements which were sent by the merchant bankers ANZ Grindlays for Indian Airlines and Morgan Stanley for Air India.

``This means that the deadline of March 31, 2001 could be missed as it would take more than six months to value the assets, inviting bids from interested parties, and finally to vet the privatisation proposals received by the government,'' sources said, adding, ``The actual sale cannot take place this fiscal.''

The government had earlier targeted disinvestments worth Rs 10,000 core by the end of the current fiscal. But, as of now, it has managed to sell only Modern Foods to Hindustan Lever for Rs 105 crore.

In the case of Air-India, say officials, the disinvestment ministry is still trying to evolve consensus within the government and outside for a sale. The Parliamentary Committee attached to the aviation ministry has already objected to the 26 per cent sell-off to any foreign airline. The government also wants to divide the unutilised bilaterals between Indian Airlines and Air-India.

Air-India has set up various internal committees which are looking at various aspects of the sell-off. This includes asset valuers, legal, public relations and real estate committees.

Many Indian and foreign airlines have already evinced interest in picking up stake in both the airlines. While ITC, Reliance and the Tatas are front-runners in Indian Airlines disinvestment, Emirates, Virgin and Singapore Airlines are planning to bid for Air-India.