India Says IPO Is an Option for Flag Carrier After Bungled Sale

(Bloomberg) -- India is open to listing shares of its flag carrier, an official said, as Prime Minister Narendra Modi’s administration struggles to find ways to dispose of the state asset after a botched plan earlier.

By selling shares in an initial public offering, the state can retain control of Air India Ltd. and also raise cash to fund its operations, a senior government official told reporters in New Delhi, asking not be identified citing rules. A group of ministers formed by the Ministry of Finance is considering other options as well, but is not in favor of giving control to a foreign entity, the official said.

Modi’s most high-profile asset sale didn’t see a single interested bidder by the time a deadline expired on May 31, dealing a blow to his reformist image ahead of a general election due next year. Air India, with $8 billion in debt and surviving on a taxpayer-funded bailout, hasn’t made money since its 2007 merger with another state-run domestic operator Indian Airlines.

Following the debacle last month, the government is planning to revive the process with new guidelines, including re-examining a clause requiring a minority state stake, Subhash Chandra Garg, a senior official in the Ministry of Finance, said in an interview on Monday. Previous attempts by the Indian government to dispose of the carrier were derailed by political opposition.

To contact the reporters on this story: Debjit Chakraborty in New Delhi at dchakrabor10@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan

©2018 Bloomberg L.P.