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New Delhi: The Center will try to sell its stake in former Air India subsidiaries in FY25, a senior official said, but the privatization of Container Corporation of India is unlikely to see any momentum soon.
“Air India subsidiaries may be subject to disinvestment, they are part of the ongoing (pipeline),” Tuhin Kanta Pandey, secretary of the department of investment and public asset management, said in an interaction on Sunday.
Subsidiaries of Air India include Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL) or Alliance Air, Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI).
These are held by Air India Assets Holding Ltd, a special purpose entity created in 2019 to hold Air India’s non-core assets and debt. The government has held roadshows for the divestment of AIESL, the country’s largest maintenance, repair and overhaul company, and last year received approval from a group of ministers to begin the process. The divestment of Alliance Air is also being prepared, but the government has not yet sought expressions of interest for either company.
The divestment of all subsidiaries was approved by the Cabinet in 2017, with expectations of approximately $Rs 3,000 crore will be raised from the sale of the engineering and ground handling companies. However, the process of seeking interest has not yet begun for any of the companies, despite Air India being sold entirely to the Tata Group for approximately $18,000 crore in 2021.
In the case of Container Corporation of India or Concor, it has not been clarified whether the process will begin in the next financial year. In 2019, the Union Cabinet cleared the sale of 31% of the government’s total 54.8% stake, along with the transfer of management control.
“I am not very sure that we can start the process in FY25. It certainly cannot be concluded (within the same financial year),” Pandey said, when asked about the government’s plan to seek expressions of interest.
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Concor management has told analysts in recent investor calls that they see “no further movement” on the divestment plan, even though the government has not reversed it.
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