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Nine months after the Union Cabinet’s in-principle nod for offloading the government’s stake in Air India, the ball has finally been set rolling to privatise the bleeding airline. A preliminary information memorandum(ज्ञापन/स्मृतिपत्र) was unveiled last week by the Civil Aviation(विमान वहन/वैमानिकी) Ministry for prospective bidders(भावी बोलीदाताओं). According to this, the Centre will divest(छीनना/ले लेना) 76% of its stake in AI. A 100% stake is being offered in its subsidiary(सहायक/अतिरिक्त) Air India Express, and a 50% stake is on offer in its ground handling operations arm. Other subsidiaries, such as Alliance Air, Hotel Corporation of India, which owns the Centaur properties in New Delhi and Srinagar, Air India Air Transport Services and Air India Engineering Services, are not being sold — they will be transferred to a special purpose entity along with roughly a third of AI’s ₹48,781 crore outstanding debt. Effectively, the government is offering a majority stake in AI and AI Express with management control, as well as a cumulative(संचयी/संचित) debt burden worth ₹33,392 crore. For prospective buyers, the attractiveness(आकर्षणशीलता) of AI’s international flying rights and slots would be offset by the possibility of taking on so much debt and putting a plan in place to whittle it down or refinance the loans. Details of the reallocation(पुनः आबंटन) of these liabilities(उत्तरदायित्व /देनदारियों)between AI and AI Express, and the logic behind it, will only be shared with bidders at a later stage when requests for proposals are issued.
Given the uncertainties(अनिश्चितताओं/विकल्प) over its debt burden(बोझ/भार), it will not be a surprise if those bold enough to make a bid(बोली लगाना/आदेश देना) for AI find it difficult to offer a lucrative(लाभप्रद/निर्मूल्य) price to the government. It is worth pausing to see if serious investors are enthused(उत्साहित/ख़ुशी आना) by the government’s decision to retain 24% stake in the airline (which will possibly come with one or two bureaucrats(नौकरशाहों) nominated to the airline’s board of directors). In 2016-17, the airline suffered(भुगतना/हानि होना) a net loss of ₹5,765 crore, owing mainly to its high interest costs. While debt has been the major reason for AI’s losses in recent years, operational inefficiencies(निष्फलता/प्रभावहीनता) and poor management have been bugbears for long. The government is expected to offload its residual(बचत/शेष) 24% stake at a later date, pinning its hopes on a better valuation after the new owner has fixed the airline’s legacy issues. The real benefit of privatisation will be that the airline will no longer drain(निकास) taxpayer funds, after thousands of crores have been infused over the years to keep it up and running. That its new owner would get some room to rationalise(युक्तिकरण/सिद्ध करना) its large workforce a year after the transaction and the government is thinking of footing the bill for some benefits paid to retired employees, such as complimentary(प्रशंसनीय/सराहनीय) air tickets, sounds good. The government is understandably keen to close the AI sale transaction soon, preferably(विशेषतः/अधिमानतः) by early 2019, in order to bolster its reformist credentials. But investors will look for the finer details to ascertain the carrier’s true worth.
Important Vocabulary
1.Cumulative(संचयी/संचित)
Synonyms: aggregate, increasing, accumulative, additive, additory
Antonyms: decreasing, subtracting
2.Burden(बोझ/भार),
Synonyms: anxiety, concern, difficulty, duty, hardship
Antonyms: advantage, aid, assistance, benefit, blessing
3.Enthused(उत्साहित/ख़ुशी आना)
Synonyms: approving, excited, eager
4.Suffered(भुगतना/हानि होना)
Synonyms: deteriorate, endure, experience, get, go through
Antonyms: calm, please, soothe, surrender, yield
5.Complimentary(प्रशंसनीय/सराहनीय)
Synonyms: appreciative, congratulatory, polite, respectful, adulatory
Antonyms: unmannerly, blaming, censuring, critical, denouncing
Credits to The Hindu News Paper
