India Is Said to Call Off Flag Carrier Sale After Failed Attempt
(Bloomberg) -- India has decided not to immediately revive a plan to sell its money-losing flag carrier Air India after a failed attempt to find a buyer for the state asset, people familiar with the matter said.
Prime Minister Narendra Modi’s administration has virtually abandoned the planned sale of Air India Ltd. after it failed to attract any bidder in a process that ended last month, the people said asking not to be identified as the matter is private. The government now plans to focus on improving its operations and selling the carrier’s building in Mumbai, ground handling and aircraft maintenance units.
The failed sale is a setback for Modi’s efforts to showcase his credentials as a reformist steering the state away from running businesses ahead of an election due next year. Air India, which is reeling under a debt load of almost $8 billion and surviving on a taxpayer-funded bailout hasn’t made money since its merger with state-run domestic operator Indian Airlines Ltd. more than a decade ago.
The government would not make any changes to the initial proposal of offering a 76 percent stake in the carrier as the terms are considered attractive, the people said. The government is reviewing the process to fix the reasons behind the failed attempt. Earlier, Press Trust of India reported that the government had put off the sale for now.
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