The Indian government plans to sell a stake of up to 15 percent in the country's flag carrier Air India in an initial public offering, Civil Aviation Minister Praful Patel said.
Patel said the sale has resulted in the creation of a new company called the National Aviation of India, or Nacil.
Post-merger, Nacil now operates the airline under the brand Air India.
Patel said he hopes the IPO will happen in the second half of 2008. He said the IPO is part of broad basing ownership and will also let the employees have four percent to five percent stake in the company.
On Nacil's relatively small equity base of US$36.7 million, a senior Nacil executive said the company has asked the government to boost its equity base with a $254 million financial package.
He said the airline needs the funds for integration costs and loans to buy more planes, adding that soft loans from the government could be an option. He added that the airline needs an infusion of funds for future expansion.
Patel said the government has no plans to revise a policy that bars foreign airlines from buying a stake in domestic carriers.
He said the airline does not want airlines in India to be a soft target for international carriers.
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Source: cargonewsasia
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