The Hindu : Business : Centre to appoint advisors for IA, AI public offerings

Online edition of India's National Newspaper
Friday, Jul 15, 2005

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Centre to appoint advisors for IA, AI public offerings

Staff Correspondent

MUMBAI: The Centre will be appointing advisors for the proposed Initial Public Offerings (IPOs) of Air India and Indian Airlines, which are to tap the market later this year. Speaking on the sidelines of the `India International Jewellery Show 2005' here on Thursday, Civil Aviation Minister Praful Patel said the advisors would inform the Government on the proportion of equity to be divested in the two airlines.

Mr. Patel said the Government was planning routes like employees stock option plan (ESOP) for divesting the stake of carriers to finance the airlines' fleet acquisition plans.

A fortnight before the announcement of the new civil aviation policy, Mr. Patel reiterated the Government's stand that no foreign airlines would be allowed to invest in an Indian domestic carrier. Although the Government had earlier increased the cap on foreign direct investment (FDI) in the Indian aviation sector to 49 per cent, foreign carriers were not permitted to participate in the equity of domestic operators.

Mr. Patel said the Prime Minister had constituted a committee to look into Indian Airlines' proposal to acquire 43 aircraft from the European aircraft maker, Airbus Industrie, as part of its fleet acquisition plan and that price negotiations were still on.

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