Air India Sale: Employees to be given 3% shares under ESOP

Air India Sale: The government, while inviting bids for Air India for the second time after two years, has said the selected bidder will have to ensure that 3 per cent of the equity shares of the acquired company are offered to its permanent employees as per terms of employee stock options or ESOP.

The detailed terms and conditions of ESOP, however, will be provided at the request for proposal or RFP stage.

"In the event, we (the Centre) are finally selected to enter into definitive documents as per the RFP for the proposed transaction, we shall ensure that 3% of equity share capital of the company is offered to the permanent employees of AI as per terms of an ESOP, on terms as may be specified at the RFP stage," the bidding document says.

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The Centre will likely set aside about 98 crore shares under the ESOP, PTI quoted an official as saying.

The government has announced the sale of 100 per cent stake in debt-laden Air India. As part of the strategic disinvestment, Air India will also sell 100 per cent stake in low-cost airline Air India Express and 50 per cent shareholding in AISATS, a joint venture between Air India and Singapore Airlines that offers ground handling services.

Management control of the airline will also be transferred to the successful bidder.

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Air India also has interests in Air India Engineering Services, Air India Air Transport Services, Airline Allied Services and Hotel Corporation of India. They will be transferred to a separate company -- Air India Assets Holding Ltd (AIAHL) -- and will not be a part of the proposed transaction.

According to the document, the airline's debt worth Rs 23,286.5 crore would remain with Air India and Air India Express at the time of closing of the disinvestment. The remaining debt will be allocated to the new entity.

As on November 1, 2019, Air India and Air India Express had 16,077 employees on their rolls, including permanent people. EY is the transaction advisor for Air India disinvestment process.

Also read: Air India sale: Debt burden on buyer to be Rs 23,286 crore

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Also read: Govt to sell 100% stake in Air India; issues bid document

Edited by Manoj Sharma