Plans afoot to sweeten bid for Air India’s privatisation move : The Tribune India

quick links

States

Cities

Opinion

Life

Move Ahead

Classified

Reach Us

The Tribune

Punjabi Tribune

Dainik Tribune

Plans afoot to sweeten bid for Air India’s privatisation move

In a bid to resurrect Air India privatisation, the government is planning to give flexibility to potential investors to decide on the humongous debt with the national carrier, a top official has said. File photo

New Delhi, October 20

Debt stands at Rs60,074 cr as of March ’19

The potential investors have given feedback that due to the uncertainty created by Covid in the aviation sector the debt should not be fixed at the EoI stage
As per the Air India EoI floated by DIPAM in January, of the airline’s total debt of Rs60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd, a special purpose vehicle

The flexibility to potential investors on the quantum of the Rs 60,074-crore debt that they want to absorb will replace the current condition of the buyer taking over more than a third of the debt and transferring the rest to a special purpose vehicle, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said.

The potential investors in Air India have given feedback that due to the uncertainty created by Covid in the aviation sector the debt should not be fixed at the Expression of Interest (EoI) stage, he added.

As per the Air India EoI floated by DIPAM in January, of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle. The government is seeking to sell 100% of its stake in the state-owned national airline, including Air India’s 100% shareholding in AI Express Ltd and 50% in Air India SATS Airport Services Private Ltd.

“On Air India, we would try and sort out the investor issues with respect to debt... We will see whether we can give flexibility at least at the EoI stage and let the debt be determined through the market rather than freezing it upfront. This is what we are examining,” Pandey said.

He said a decision on this would be taken soon by Air India Specific Alternative Mechanism (AISAM) and if there is a change in the Preliminary Information Memorandum (PIM), the potential investors would be given time to raise queries.

The AISAM would take a final call on whether bidding for Air India will take place based on equity value or enterprise value, he added. — PTI