New Delhi: Two biggest laggards in the public sector, Air India and Bharat Petroleum Corporation, are expected to be sold by the government by March next year, sources close to Finance Ministry said.
Earlier, Finance Minister Nirmala Sitharaman had revealed the crucial information in an interview with The Times of India. The ailing national carrier is facing financial stress, sitting on a debt pile of around Rs. 58,000 crore.
Recently, the cabinet approved changes in the process of disinvestment where the prospective bidders will be heard in roadshows before the expressions of interest (EoIs) are floated so that concerns of the prospective buyers are addressed. Last year, the government had floated the Expression of Interest (EoI) for Air India to offload a 76 per cent stake and management control in the airline but it did not get a single bidder. The government currently owns 100 per cent equity of Air India.
Air India posted an operating loss of around Rs. 4,600 crore in the last financial year mainly due to higher oil prices and forex losses but the debt-laden carrier expects to turn operationally profitable in 2019-20, according to senior officials.
In the case of Bharat Petroleum Corporation Limited (BPCL), a group of secretaries had agreed for the sale of the government's entire 53.29 per cent stake in the company in October. With the sale 53 per cent of its stakes, the government is hoping to mop up around Rs. 65,000 crore. The privatisation of BPCL will not just shake up the fuel retailing sector, dominated by state-owned firms, but also help to meet at least a third of the government’s Rs 1.05-lakh-crore divestment target.
BPCL had a market capitalisation of about Rs 1.02 lakh crore and even a 26 per cent stake sale at this valuation would fetch the government Rs 26,500 crore.