Finding Bakra getting more difficult ?
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Today’s LiveMint carries following news :
Air
India’s debt could turn out to be 40% higher than previously expected as the
airline’s books are combed even as the government has received the first
foreign interest in the airline, civil aviation minister Ashok Gajapathi Raju
said.
“When our exercise of calculating Air
India’s debt began, we found that the sum was hovering around the Rs 50,000 crore mark. But I won’t be surprised if the total debt
reaches Rs70,000 crore. Since people are looking at the books carefully,
they may find more,” the minister told Network 18 in an interview published on
Sunday.
Air India had been estimated to have a
total debt of about Rs 48,877 crore at the end of March 2017, of which Rs
17,360 crore is aircraft loans and Rs 31,517 crore is working capital loans.
“According
to me, Air India is a debt trap. I
said as much in Parliament as well. As far as our account books are concerned,
we held an internal meeting where we saw that this accounting year is sorted
for us as a part of our own dividends that we get will be used up. The next
accounting year needs to be looked into,” he added.
“Another foreign operator has also shown
interest in buying 49% stake. So there is certainly a lot of interest” in Air
India, the minister said, without disclosing the name.
Civil aviation secretary R.N. Choubey
told Mint that a foreign firm has sent “unsolicited” letter of
interest for Air India. Foreign firms can own 100% of an Indian airline but
foreign airline firms can own only 49% of an Indian airline.
This month, the government had also eased
rules allowing foreign airlines to buy a stake of up to 49% in Air India with
prior government approval but with the caveat that substantial ownership and
effective control of Air India will remain with Indian nationals as is the case
with all domestic airlines.
IndiGo, run by InterGlobe Aviation Ltd,
and Tata group have shown interest in Air India’s operations.
Turkey’s Celebi Aviation Holding, Bird
Group, Menzies Aviation Plc and Livewel Aviation Services Pvt. Ltd have also
shown interest in the national carrier’s subsidiaries.
Air India has a fleet of about 140 planes,
with a 17% share of traffic on routes linking India to international
destinations and about 13% share of the domestic market.
The national carrier, which is part of the
world’s biggest airline grouping Star Alliance, also has prime slots at
airports across the world along with land banks and buildings, among its
assets.
The government hopes to invite expressions
of interest from companies after Union Budget 2018, Mint reported on 9 January.
Consulting firm CAPA Centre for Aviation
said this month that it expects “significant interest from foreign airlines” as
also “4-6 serious bids for AI, subject to bid conditions”.
Last June , Shri Raju had told a TV anchor :
“ There are hardly any bakras around, so to get one
is difficult and businessmen are businessmen “
After his today’s
revelation about Air India’s debt position , I will not be surprised if Shri
Raju fails to find that proverbial “ Bakra “ , who is willing to buy Air India, unless the government goes beyond
the tinkering ( eg : splitting Air India into 4 smaller entities ) and accepts
suggestions that I made in my following blog / email :
Finding
a Bakra ? Possible ? [ 04 June 2017 ]
29 Jan 2018
www.hemenparekh.in
/ blogs
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