BackAir India stake sale to get stretched to FY21
The government has reduced the debt on the books of Air India and Air India Express to about ₹23,287 croreThe government’s stake in Air India, Air India Express Ltd. Air India SATS Airport Services is on offer
PremiumNEW DELHI : Privatisation of Air India and stake sale in its subsidiaries for which bids have been invited, is set to spill over to FY21 with the government giving more time to investors for clearing doubts on the terms of sale.
The ministry of civil aviation has extended the due date for investors to seek clarifications on the terms of sale up to midnight of 6 March, from the earlier deadline of 11 February, as per a change notified by the ministry on the information document given to investors. “This invariably means that the process of disinvestment will get stretched to FY21 as investors will need to be given at least 15 days to make their submissions (expressions of interest) after their queries are clarified," a person familiar with the development said on condition of anonymity. Qualified bidders will then make financial bids.
The government started the process on 27 January by releasing an information document for investors and offering access to financial and other data of the companies on the block. The government’s entire stake in Air India, its 100% stake in low-cost subsidiary Air India Express Ltd. and 50% stake in ground handling unit Air India SATS Airport Services Private Ltd. are on offer.
The stake sale is unlikely to fetch big revenue receipts to the government but, it will no longer be required to keep bailing out the national carrier which has been under capital infusion for the past many years. To sweeten the transaction, the government has reduced the debt on the books of Air India and Air India Express to about ₹23,287 crore, which gives certainty to investors about the liabilities of the companies. A large part of the debt burden of the companies, the bulk of which is of Air India, will be transferred to a special purpose vehicle, Air India Assets Holding Ltd.
Civil aviation minister Hardeep Puri said on 17 February that he has held discussions with employee representatives and that the buyer will have to retain current employees for a negotiated time frame so that employees do not face any uncertainty after the national carrier’s privatization.
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