Potential buyers of airline Air India and oil firm Bharat Petroleum Corporation Ltd. (BPCL) will not get a free hand to shed excess workforce. The government is taking measures to protect the jobs of several employees in the share sale agreement. To remove inefficiencies, the buyers would have to retain the employees of public sector companies as there are more on rolls than the private sector. The secretary of the Department of Investment and Public Asset Management asserted that the government will follow a two-stage bidding process for selling entire shares of Air India and BPCL.
The first stage is to invite the potential bidders and giving them access to data room on the companies for due diligence and the second stage would be where price bids will be invited. For Air India, the expression of interest has been invited by March 17 and for BPCL the same would follow in the next few days.
However, the conditions are not made public yet as to how the government will protect the jobs but share purchase agreement will be signed with an acquirer who will offer the highest bid for stake. As the government is selling its entire 100 percent stake in Air India, it is also wanting effective control to stay with Indian nationals. The airline which was acquired by the government has not made a profit since 2007 and has a total debt of Rs. 60,074 crores, out of which the bidder must takeover Rs. 23,286.5 crores.
The move of privatization has come for meeting the record of Rs. 2.1 lakh crore target which FM Nirmala Sitharaman has set from disinvestment proceeds in the Budget 2020-21.