New Delhi: The Air India stake sale has drawn a blank with the government reporting that it has not received any bids after the deadline for submitting expressions of interest ended on Thursday.

All possible options including inviting fresh bids under revised terms will be proposed to a ministerial panel entrusted with Air India disinvestment in as early as two weeks, civil aviation secretary Rajiv Nayan Choubey told reporters here.

The civil aviation ministry said in a tweet quoting the transaction adviser EY that no response has been received for the Expressions of Interest (EoIs) floated for the strategic disinvestment of Air India. “Further course of action will be decided appropriately," it said. Choubey said the government was expecting better investor participation.

Experts said the terms of the sale have to be revised to go ahead with the privatization of the loss-making national carrier.

One key concern of investors was the level of management flexibility available to them with the government retaining 24% stake and all attendant shareholder rights available to it under law, rather than opting to remain as a minority financial investor. The terms that the government will set at a later stage in the sale process relating to protection of employees as well as the level of debt to be retained in the company are among the other key concerns of investors. As per the current plan, Air India and Air India Express will retain 24,576 crore excluding net current liabilities after the sale. Investors have told the government that this is not in line with the airline’s potential future earnings.

Kapil Kaul, chief executive, India and Middle East, Centre for Asia Pacific Aviation, said it may be desirable to modify the terms of disinvestment to align them with the expectations of investors. “Investor concerns are in general about labour-related issues and the level of debt to be retained on the books of the companies. Investors would also like some level of comfort that on day-to-day operations, they will have a free hand without government interference," said Kaul.

The civil aviation secretary said the entire process so far has been a learning experience and that the ministerial panel will explore all options in the light of inputs from the transaction advisor. “Various options are available," said Choubey.

Pressing ahead with the sale process will indicate that the Modi administration will not back off from its policy of privatising loss making state-owned enterprises when all efforts to revive them fail. It, however, remains to be seen that whether the National Democratic Alliance government will manage to sell Air India in its fifth year in office before polls early next year. According to Choubey, inviting fresh bids under revised terms, if the ministerial panel decides so, will not be time-consuming. “We now have better understanding of the market," he said.

The government had left some of the finer aspects of the sale to be disclosed in the request for proposal and in the shareholder agreement to be signed with the highest bidder. Investors were not ready to put in initial bids with no knowledge of these terms. This approach will also be reviewed in case of inviting fresh bids.