Tasks SBI Caps to chalk out plans for subsidiary companies
Air India has set the ball rolling for its eventual strategic disinvestment by setting up five internal project teams to work towards ensuring that the timelines set by the government are met and the objective is achieved in a time-bound manner.
SBI Capital Markets is being appointed to hand-hold the airline during the entire disinvestment process and the progress will be reviewed on a fortnightly basis.
In an officer order issued on November 18, the Air India chairman and managing director (CMD) Rajiv Bansal said the five teams headed by senior AI officials would deal with the aspects of Finance, HR, P&F (properties & facilities) department, secretarial and procedural matters, including formalisation of relationship with subsidiary companies and preparing a future business plan of for the subsidiary companies and bilateral slots, besides other commercial arrangements and issues.
According to the order, SBI Caps is being assigned the responsibility of preparing three and five-year business plans for subsidiary companies to be divested, obtaining approvals and no-objection certificates from the consortium of banks for the transfer of real estate properties and other security, besides apart from assisting and guiding Air India on other disinvestment matters.
The five project teams would work under the overall coordination of Director (Finance) V. Hejmadi and finance advisor S. Venkat, who would be responsible for managing the progress on disinvestment from time to time and as well as coordinating with the transaction advisor, legal advisor and asset valuer — all of whom are in the process of being appointed. Mr. Hejmadi and Mr. Venkat would apprise the CMD on the fortnightly progress.
The airline is currently afloat on taxpayers’ money and has a debt of over Rs 50,000 crore. On June 28, the Cabinet Committee on Economic Affairs (CCEA) had given its in-principle for strategic disinvestment of Air India and five of its subsidiaries.
A ministerial group is currently looking into treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries, among other aspects.