New Delhi: The civil aviation ministry today said that the management of Air India was empowered to take any decision during staff selection, following reports that some of its board directors had opposed appointment of Pawan Arora as COO of its low-cost arm Air India Express, reports PTI.
"If there is any controversial appointment, I am sure that Air India management and the Air India board will take a suitable decision. It is a question of an Air India employee, so let the Air India management and board take care of these issues," civil aviation minister Praful Patel told reporters here.
He was replying to questions on reports that some of Air India's independent directors had raised objections on the appointment of Mr Arora as well as the functioning of its top management.
He asserted that there was "no controversy" in the board's independent directors meeting top officials in the Prime Minister's Office (PMO) to discuss the issue on functioning of Air India.
Yesterday, the five independent directors of the company - Anand Mahindra of Mahindra and Mahindra Ltd, Ficci's secretary general Amit Mitra, Ambuja Realty chairman Harsh Neotia and former air chief Fali H Major - met Prime Minister's principal secretary T K A Nair and reportedly expressed their anguish over the appointments being made by the company.
They also met civil aviation minister Praful Patel today and briefed him about the meeting with the PMO.
"There is no question of any controversy. Independent directors wanted to meet me and they had courtesy call. They have been on the board for more than six months and they wanted to share their views with me," Mr Patel said.
Apart from the issue of Air India COO, issues concerning Air India's financial position, debt situation and human resources are also understood to have come up for discussion in the meeting with TKA Nair.
Talking about the equity infusion in the state-run airline, Mr Patel said that "Rs1,200 crore equity for Air India is earmarked in this year's budget and it will come up before the Cabinet Committee on Economic Affairs this month".
Air India, which has a debt of an estimated Rs18,000 crore, has sought recasting of its debt on the lines of Vijay Mallya-owned Kingfisher Airlines, which recently got RBI approval for debt restructuring.
The airline has been working on a financial turnaround plan to enhance revenue and cut losses. The proposals include tapping of business opportunities by launching a feeder service, called 'India Hopper', with about 40 small aircraft by March next year.
Based on these proposals to tap business opportunities and cut costs, the government is likely to infuse Rs1,200 crore as equity to help Air India meet its financial commitments, mostly repaying of loans and interests for aircraft acquisition.
With a renewed surge in air traffic, Air India has improved its finances significantly in terms of revenue and yield. It has also enhanced savings on fuel by almost Rs350 crore and returned 16 leased aircraft.
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New Delhi: ICICI Bank and HDFC Bank plan to sell their 50% stake in state-owned Hindustan Petroleum Corporation Ltd's (HPCL) oil exploration firm, Prize Petroleum Co Ltd to a strategic investor, reports PTI quoting a company official.
"An advertisement has been issued seeking offers from potential buyers of the stake," Prize Petroleum managing director M R Pasrija said on the sidelines of the Petrotech-2010 oil and gas conference here.
HPCL holds 50% in Prize Petroleum while ICICI Bank has 35%, ICICI Ventures 10% and HDFC Bank 5%.
"All the three (ICICI Bank, ICICI Ventures and HDFC Bank) are selling their stakes," he said but refused to elaborate.
So far, HPCL and the financial institutions have contributed Rs10 crore as equity each in the company.
Mr Pasrija said offers from potential buyers have been invited by end of this month.
Prize Petroleum operates Cluster-7 marginal fields of Oil and Natural Gas Corporation Ltd Cluster 7 is estimated to hold 180 million barrels recoverable oil reserves. It also has two exploration blocks awarded under the fourth and sixth rounds of auction under New Exploration Licensing Policy.
Sources said HPCL may buyout the financial institutions in the company if it does not get favourable response. HPCL management wants to turn the company into a 100% subsidiary.
HPCL and Prize Petroleum are both in market for exploration assets and may be acting at cross-interest in some areas, they said adding HPCL already has an exploration and production division, which is working parallel with Prize Petroleum, and merging the two can yield better results.
HPCL, in partnership with consortium companies, currently has 19 upstream assets including four blocks in Oman, Australia, and Egypt. It plans to invest around $500 million in the upstream sector by March 2012.
Mr Pasrija said the financial institutions have been looking to exit Prize Petroleum, and have been trying to move out by selling to a strategic investor.
In 2008, Jaiprakash Associates Ltd had entered into an agreement to buy 45% in Prize Petroleum from ICICI Bank and ICICI Ventures, but the cement maker later walked out of the deal.
Prize Petroleum is looking for prospective or producing assets in Russia and other Commonwealth of Independent States such as Kazakhstan.