The Indian government is planning to sell a 100% stake in ground handling firm Air India Air Transport Services Ltd (AIATSL), PTI newswire has reported.

According to an official memorandum published by the government, 98% of shares will be earmarked for sale to a private investor, while the remaining 2% would be distributed to the firm's employees upon the conclusion of the former transaction.

Air India Assets Holding Limited, the government-owned special purpose vehicle managing most of Air India's assets, has issued an agreement in principle for the transaction.

AIATSL is a profitable firm and has posted a INR7.1 billion rupee (USD100 million) net profit for the last full year. It provides ground handling services for nearly 50 airlines, not just Air India.

Last year, the Indian government unsuccessfully tried to divest from Air India and its subsidiaries.