2 min read.Updated: 23 Jul 2021, 06:06 AM ISTRhik Kundu
The request for proposal has been shared with qualified interested bidders
Multiple EoIs have been received by EY, junior civil aviation minister V.K. Singh told Parliament
The government expects to receive financial bids for Air India Ltd by 15 September, junior civil aviation minister V.K. Singh said on Thursday.
“The last date for the submission of EoI (expression of interest) was 14.12.2020. Multiple EoIs were received by the transaction adviser (EY)," Singh said in a written response to queries in Parliament.
He said the request for proposal along with draft share purchase agreement has been shared with qualified interested bidders by the transaction adviser on 30 March. “The financial bids are likely to be received by 15.09.2021," he said. Singh did not disclose the shortlisted potential bidders.
The national carrier’s divestment process has been delayed by a few months due to the pandemic and also due to long-drawn processes such as physical inspection of assets by potential bidders, Tuhin Kanta Pandey, secretary of the department of investment and public asset management (Dipam), the nodal agency involved in the divestment process, said at the Mint India Investment Summit 2021 in April.
The government aims to conclude 100% divestment of Air India before the end of this fiscal year through March.
So far, the Tata group is among the front-runners to acquire Air India.
According to media reports, SpiceJet’s chairman and managing director Ajay Singh has also been shortlisted to bid for Air India in his individual capacity. Mint could not independently ascertain this.
Meanwhile, Singh said the moveable assets of Air India will be transferred to the airline’s new owners after privatization.
“Immovable assets are being monetized by Air India to offset the debt of Air India Ltd," he said.
While the government remains committed to Air India’s privatization, the carrier’s liabilities are expected to cross $20 billion by 2024-2025, which includes losses reported during FY21 and FY22 due to the pandemic, aviation consultancy firm Capa India said in its India Aviation Outlook FY22.
“Hence, the equation from an investor’s perspective is a potential liability of around $20 billion before the business turns around. The government must therefore keep this massive financial burden in mind and consideration should be given to making changes to the terms and conditions," it said.
Air India, which has never made a net profit since its merger with Indian Airlines in 2007, will incur a net loss of ₹9,500- ₹10,000 crore in the year ended March 2021, up from a ₹8,000 crore loss recorded in the previous year, a senior official of the airline had earlier told Mint.
The airline reported losses of ₹7,982.83 crore (provisional figure) in 2019-20, ₹8,556.35 crore in 2018-19, and ₹5,348.18 crore in 2017-18.
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