The government should consider selling a part of its stake in Air India (AI), a panel set up by finance minister Pranab Mukherjee-led group of ministers (GoM) has said.
A stake sale could turnaround the fortunes of the loss-making national carrier, struggling with a debt of nearly Rs
50,000 crore and accumulated losses of more than
Rs. 20,000 crore.
“The group strongly feels that once Air India is able to achieve an appropriate level of growth rate, divesting the airlines to a strategic partner could be considered,” a group of officers said in its report submitted to the government.
The report, reviewed by HT, has recommended that the government infuse Rs. 6,750 crore this fiscal (2011-12) and fund AI’s Rs. 18,929-crore aircraft loans.
The panel, comprising top finance and aviation ministry officials, was mandated to examine and vet the blueprint of AI’s turnaround and financial restructuring plans. Its report will form the basis of future equity infusion and a bailout package for AI.
“If AI has to be continued as a going concern, the turnaround plan with all its aspects need to be owned by the management and employees,” the report said.