Link Legal advised Air India Limited, the national carrier of India in its disinvestment transaction, pursuant to which the Government of India transferred its stake in Air India Limited, Air India Express Limited and Air India SATS Airport Services Private Limited to Tata Sons through a competitive tendering process.
New Delhi: The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval to fourth tranche recommendations of NITI Aayog on strategic disinvestment of CPSE (strategic disinvestment of Air India and five of its subsidiaries) based on the recommendations of Core Group of Secretaries on Disinvestment (CGD).
It should be incumbent on the Air India-specific Alternative Mechanism, to be headed by the Union Finance Minister, to ensure all national security related matters are fully taken into consideration while taking the call when it comes to finalising the universe of bidders for the national carrier.
To consider and implement the ‘In principle’ approval for strategic disinvestment of Air India and five of its subsidiaries, ithas been decided to constitute an Air India-specific Alternative Mechanism headed by Minister of Finance, including Minister for Civil Aviation and such other Minister(s) to guide the process on strategic disinvestment from time to time and decide the following:
Treatment of unsustainable debt of Air India;
Hiving off of certain assets to a shell company;
Demerger and strategic disinvestment of three profit-making subsidiaries;
The quantum of disinvestment; and
The universe of bidders.
It is significant that the quantum of disinvestment coupled with the universe of bidders will be decided through the Air India-specific Alternative Mechanism. It should be incumbent on this authority, which will be headed by the Union Finance Minister, to ensure all national security related matters are fully taken into consideration while taking the call when it comes to finalising the universe of bidders for the national carrier. Offering stakes beyond 49 per cent to a foreign company is a matter that needs to be sorted out with extreme caution in this case.