Air India seeks help for selling securities of its PF trusts

Divestment-bound Air India is looking to sell securities of its two provident trusts AIEPF and IAEPF, and has sought applications for transaction advisors to help with the proposed sale of the securities.

The Air India Employees Provident Fund (AIEPF) trust and Indian Airlines Employees Provident Fund (IAEPF) trust are governed by the Provident Fund Trust Act, 1925.

The two trusts' investments together amounted to Rs 4,500 crore as of August 31, 2021, according to the tender document, seeking RFPs for the appointment of the transaction advisors.

Out of AIEPF trust's corpus, 68.75 per cent was invested in central and state government bonds, 22.40 per cent in corporate bonds and 8.85 per cent in SDS (Special Deposit Scheme).

In the case of IAEPF trust, 45.93 per cent of the investments were in central and state government bonds, 39.28 per cent in corporate bonds, 13.35 per cent in SDS and 1.44 per cent in equity.

The last date for Request for Proposal (RFP) submission for appointment of transaction advisors is October 18.

Among others, the transaction advisors will guide the PF trusts for the process to be adopted for the sale of securities.

Erstwhile Indian Airlines and Air India were merged into a single entity in 2007, National Aviation Company of India Ltd, which was later renamed as Air India Ltd.

The divestment process of Air India is in advanced stages and the government is expected to soon announce the winning financial bidder.

The government is to sell 100 per cent of its stake in Air India as well as the airline's entire stake in AI Express Ltd and 50 per cent shareholding in Air India SATS Airport Services Private Ltd.

In January 2020, the divestment process had started but faced delays due to the coronavirus pandemic.

Photograph: Vivek Prakash/Reuters