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June 13, 2001
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Money > Business Headlines > Report June 13, 2001 |
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A-I to shed PSU status before salePuja Mehra The government has decided to reduce its stake in Air India to below 50 per cent before the strategic sale of 40 per cent share in the state-owned airline to make it a non-public sector unit. The government is weighing two options to achieve this, top officials said. The first is to park 10 to 11 per cent A-I equity either with financial institutions or a trust, especially created for the purpose, till an initial public offer for 10 per cent stake is made. Another option is to offer about 100 shares each to the 17,000-odd A-I employees as Esops before offloading the stake to a strategic partner. According to officials, the divestment department is for the second option since it is in accordance with the cabinet committee on divestment decision. The CCD cleared the sale of 40 per cent stake to a strategic partner, in addition to 10 per cent each in favour of financial institutions and employees, last year. The only problem, sources say, is that the government is aiming to complete the strategic sale by July-end, which may not allow it sufficient time to complete the Esop. In that case, the government will have to form a trust for parking the 10 per cent stake. The decision to further reduce the government stake in A-I has been taken following serious concerns raised by the bidders. The bidders, it is learnt, told the government that if A-I continued to be governed by rules laid down for public sector enterprises, it would be difficult to turn it around. Powered by YOU MAY ALSO WANT TO READ:
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