So you are comparing the valuation at the time of the sale to the value of the shares now? And what has VJM done with the assets acquired at the time?
To be sure a lot of VJM's grandiose plans since 2006, which included flying A380's from BLR to SFO and Dusseldorf have since come to naught. That doesnt take away the fact that core of his strategy has been to run down the value of companies and then take them over. Shaw Wallace, Air Deccan and now Air India. So far his targets were privately owned firms: but now he has targetted the national carrier.
>> Driving a valuation down would mean Air India is listed on the BSE or NSE. Not sure it is, s
That would be true, if the govt was doing the right thing and opting for first restructuring the company debt, increasing the equity base from the 175 odd crores today and then floating the company on the bourses. However the plan floated by the minister is for a "strategic sale", and his crony is the only one in the market to buy.
>> Just an observation as corporates seem to be a bad and evil word in your dictionary.
Nice way to get personal in a debate! anyway be that as it may, nobody said anything about corporates being evil. I didnt and nor did anyone else. Except yourself.
Corporates who try to influence policy through corrupt politicians and affect hostile takeovers are a different breed altogether. The reference has always been not to Corporates but to Corporate Sharks: a different breed altogether. Crony capitalism of this sort benefits no one and destroys the industry.
The airlines taken over will end up as mere shells after their assets have been sold off and thousands of pilots and staff will end up on the streets.
So you are a VJM fan? Do you also think a Frank Lorenzo was good for the airline industry?
>> I believe Mr Raja is in Jail for attempting just that.
not really. but we shouldnt digress into telecom. This forum is for aviation and pilots.
I will repeat what i said earlier: the govt stake in the national carrier must be divested. The NavRatna route, earlier adopted for MTNL, ONGC etc has given the maximum returns and benefits both to the govt and the public. The "strategic sale" option, adopted for VSNL, has given the least. The govt should focus on restructuring the airlines debt, which was piled on to the airline to pay for those expensive aircraft that it didnt want in the first place (read the blog). Once the debt is restructured, the cashflow situation will automatically improve meaning the pilots and crew will finally get their pay on time and so on.
The routes that the airline was forced to withdraw from to make way for the private carriers must be restored. With a primary hub at Del T3 and secondary hubs in 7 other cities, within 2 years, we will see a profitable airline! Once profitability returns, the govt can offload equity in tranches upto 74% in the same way that it did with MTNL or ONGC.
Why is this not being done? Why the insistence on "strategic sale"? What gives?
The pilots are absolutely right in demanding answers to the actions of the management and indeed the govt. Their jobs and careers are at stake. They havent received their full salaries in months and are being forced to fight with their backs to the wall.
>> VM, a shrewd business man??? Buddy he sells alcohol which weathers all >> inflation and recession. With such cash flows he thinks thru his arse.
Yes I agree he thinks through his a**e as you say. And he has made other grandiose plans as wells that have come to naught. And his airline Kingfisher, is like a made-up hooker, looking bright and sexy outside but all hollow on the inside. Agree with all that.
However we cant be too concerned about him personally: the larger point here is that he has tried to influence policy through corrupt ministers: exactly the sort of thing that 4 directors of Telecom companies find themselves in jail today for. And the minister ought to be in jail for the same crime that Raja finds himself in jail for.
The pilots are being made the scapegoats here and the entire might of the indian state is being thrown at them. Are they really at fault for pointing out the corruption? or fighting to get paid for the job they do?